This is one of the three facilities that municipalities will have at disposal in case of financial instability, as part of the amendments to the Law on Financing of Local Self-Government Units.
Minister Besimi promoted the changes at a press conference on Thursday, saying they are part of the reforms related to the enhancement of fiscal decentralization.
“The first instrument is a conditional loan issued by the Ministry of Finance for a period of ten years. The second instrument is a zero-interest municipal bond with a 10-year maturity period, issued upon the approval of the securities by the Securities Commission. The third instrument is the structural bond, issued by the Ministry of Finance at the request of the municipality,” said Besimi.
Instead of the mayor’s duty to declare financial instability, a prerequisite for initiation of the procedure on the municipality’s financial institution is meeting one of the criteria laid down in the law.
Reforms for enhancement of fiscal decentralization, focused on increasing the financial discipline of municipalities, include measures for real planning of revenues and expenditures, rational operations and cutting non-essential costs, regular servicing of liabilities, increased financial discipline, procedures of declaring financial instability, issuance of municipal bonds and analysis of existing liabilities of municipalities and public enterprises./MIA
