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The government will take over the municipalities that are in financial crisis. The ultimatum was given by the Prime Minister Edi Rama himself, but the order is even earlier.
In 2019, the Ministry of Finance through a special instruction “On procedures for managing financial difficulties for local government units” provided for the appointment of a temporary administrator at the head of problematic municipalities.
While the municipalities at that time considered it as a violation of the autonomy of the local government, for the Finances on their part the goal was only to strengthen the local autonomy.
So far, no action has been taken, although some local government units are facing financial difficulties and are unable to repay arrears.
Despite efforts, the stock of outstanding local government liabilities remains high. Official data speak of an accumulated debt of municipalities in 6.6 billion ALL by the end of 2021, about 2300 ALL per capita.
According to statistics from the Ministry of Finance, over half of the debt is carried by 8 municipalities in the country. The Municipality of Kavaja has the highest level with 820 million ALL, followed by the Municipality of Tirana with 653 million ALL arrears, but this municipality also has the largest amount of revenue.
In a worse condition is the small municipality of Vora with 516 million ALL but also Malësia e Madhe, Pogradeci, Durrësi, Lezha and Kamza.
Most of them belong to outstanding liabilities for investments and work done for the local government, followed by liabilities for services but also non-payment for court decisions.
According to Local Finance, the municipalities of Kavaja and Vora are in serious financial difficulties based on the level of their debts and arrears and their annual expenditures, while the situation is also risky for the municipalities of Belsh, Malësi e Madhe, Cërrik, Poliçan and Roskovec.
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