Interior minister presents programme for debt-ridden local authorities

Interior Minister Haris Kastanidis on Monday presented a series of measures designed to help local authorities overcome financial difficulties and carry out a general financial overhaul.
"Local authorities cannot constantly lack funds or depend on loans to achieve their goals," he stressed, higlighting their important role in promoting economic growth.
He said the ministry's plan hinged on providing assistance to local authorities to reform their finances, which would place the ministry in a position of oversight and control. The local authorities joining the programme, on their part, were required to make their own efforts at reform.
Kastanidis said the refinancing of local authority loans from the Consignment Deposit and Loans Fund had already been launched, with an extension of the repayment period by up to 25 years and a reduction of the interest rate from 11.5 percent to 5.9 percent.
The minister noted that this significantly reduced the amounts spent to repay loans and freed funds to settle debts and cover operating needs.
On their part, the local authorities have been asked to reduce payroll costs by transferring staff to other public-sector organisations and local authorities where they were needed.
Kastanidis clarified that the over-indebted municipalities were not more than 15 and that the total borrowing of municipalities came to 1.9 billion euro, of which 1.1 billion was owed to the Consignment Deposits and Loans Fund and 800 million euro to private banks.
Overdue debts to third parties were another 800 million euro.

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