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The study examines the development of municipal economy between 2011 and 2024. It evaluates its general status based on stress calculations drawing from actual financial statements. The stress calculation estimates the debt and tax/debt ratios and possible worst-case-scenarios, and takes into account the increasing ageing of the population (especially from 2020 onwards) and its effect on municipal finances. The estimate is based on the financial development of individual municipalities between 1997 and 2010, and projects a similar scenario between 2011 and 2024.
The study shows that the threat of financial difficulty targets all municipalities in the 2020s, and that at least a third of those will face serious financial strain during the decade. This necessitates a broad readjustment. As a result of this development the differences between municipalities will increase and cause lack of loyalty between them.
According to the study, current municipalities will form five groups in the future, 1) municipalities with increasing financial difficulties; 2) growing urban municipalities; 3) readjusted municipalities; 4) consolidated municipalities; and 5) municipalities, which depend on state subsidy.
Type:
Publication
Title:
Development of municipal economy between 1997 and 2024
Printing year:
2012
Form of publication:
The publication can be accessed in pdf-format in Finnish
Date:
01.02.2012
Areas of responsibility:
Muncipal affairs
Publisher:
Ministry of Finance
Department:
Department for Local Government and Regional Administration
Ministry of Finance P.O BOX 28 FIN-00023 GOVERNMENT Tel. +358 295 16001 E-mail: valtiovarainministerio@vm.fi