The “VI Ca’ Foscari Report on Municipalities 2023” was presented at Palazzo San Giorgio. The IFEL-Anci local finance manager, Ferri: «Municipalities essential for our democracy». The professor of the Venetian university, Degni: «The predisposition is a failure. The bankruptcy procedure is now obsolete and needs to be reviewed.” The experience of Reggio Calabria.
The report on the state of health of the coffers of Italian municipalities was presented in Reggio Calabria
«The VI Ca’ Foscari report on Municipalities 2023 is multidimensional and it is important for Municipalities that it exists. It is an ongoing relationship, perhaps even encyclopedic, which however manages every year to address differentiated themes which converge in the idea that the Municipality is an essential element of our democracy and our capacity for territorial government”. It is expressed like this Andrea Ferri, Local Finance Manager of the IFEL Foundation and Anci during the presentation of the Ca’ Foscari Report, held today in the “Italo Falcomatà” Chandelier Hall of Palazzo San Giorgio.
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After the institutional greetings of the Deputy Mayor of Reggio Calabria, Paolo Brunettiwhich highlighted the most recent innovations affecting the Municipality regarding the management of the water service and, in perspective also of the waste sector, there was a greeting from the Councilor for the Budget, Domenico Battaglia, who underlined how events of this kind are fundamental in offering the necessary ideas for reform. Battaglia recalled how Reggio Calabria, precisely with reference to the financial criticality, has become a case study.
Financial crises, the Reggio Calabria experience
It fell to the General Director of the Municipality, Demetrio Barrecacarry out a long historical excursus of the stages that have marked the recent history of Palazzo San Giorgio, starting from the Mef inspection of 2011, when critical issues were identified from which the deficit of the municipal coffers emerged, to arrive at the various resolutions of the Court of the Accounts and then to the rebalancing plan.
The IFEL project to support municipalities in financial difficulty was outlined Fabrizio Fazioli, in audio-video connection. He underlined how financial crises have been “under observation for some time. This is an important phenomenon because it is expanding. There is a generalized tendency in the municipal sector towards financial tension, with great difficulty in managing and carrying out the assigned functions”. Fazioli recalled how, in this sense, there is a strong territorial connotation, considering that most of the municipalities in difficulty are located in Sicily, Calabria and Campania. Situation caused by “a multiplicity of factors”, including obviously structural difficulties in collecting revenue but also “staffing levels reduced to the bone”. After reiterating that he considers collapse and predisposition to be “unsuitable tools” for solving the problems of municipalities, Fazioli explained how the Anci and IFEL project is to support the entities, on an experimental basis, with support and assistance activities. Currently, 71 municipalities are assisted with a task force identified based on the needs of the institutions for a total of approximately 120 experts.
What the VI Ca’ Foscari report says
As for the VI Ca’ Foscari report, the professor of the Venetian university, Marcello Degni, illustrated the salient features, highlighting how the report analyzes the municipal body at an interdisciplinary level. «One of the starting points of the research that has characterized our university together with Ifel for several years – she explained – is the financial criticality which in some territories such as Calabria is very important. We have tried to analyze the causes of this financial criticality and some proposals for radical reform of the current regulatory framework have emerged. Title VIII of the Tuel must be radically reformed. The predisposition – continued Degni – turned out to be a failure. The bankruptcy is an old procedure introduced at the end of the 1980s which needs to be completely revised.”
TO KNOW MORE: Reggio Calabria, the municipality’s accounts and the end of the rebalancing plan, listen to the podcast with councilor Battaglia
Proposals emerged from this research and were formulated to the legislator: «The idea is that we need to introduce a predictive system of financial criticality that allows us to grasp the signals before highly critical problems occur. The second element is timely intervention, support from the multilevel system of municipalities in difficulty by intervening with organizational and financial support. It’s not just about finding funding. In many cases the breakdown is an organizational fact and therefore it would be necessary to intervene with support, identifying professionalism and helping the municipalities to get out of the situation they have found themselves in. Therefore: predictive model, support, replacement in the most serious cases and timeliness. Investigations that last years are not functional to overcoming the financial criticality.”
A round table on experiences of financial criticality in the municipalities of Calabria
At the end of Professor Degni’s speech, the round table on “Experiences of financial criticality in the municipalities of Calabria”, moderated by the General Secretary of the Municipality of Reggio, Antonia Criaco. The manager of the Budget Sector of the metropolitan city, Fabio Nicitaplaced emphasis on the relationships with the municipalities and the collection methods which changed from an indirect method to a direct method.
The manager of the Finance Sector of the Municipality of Reggio Calabria, Francesco Consiglio, however, after thanking the numerous representatives of many municipalities in Calabria present at the event, he recalled how the theme of the meeting represents a “very serious issue, a condition in which the municipalities of Calabria live”. «There is something that isn’t working – remarked Consiglio – if the municipalities are asked to set aside sums that they cannot then use».
The manager reiterated a concept: «The collapse does not equate to a recovery of the municipalities which must then understand how to move forward». Some figures reeled off by Consiglio were useful for understanding the context in which Calabrian local authorities operate and originate from the Svimez 2023 Report. Suffice it to say that, in 2023, the unemployment rate between 15 and 64 year olds in Italy is at 7 .8%, in Calabria at 16.2% and in Reggio Calabria at 16.1%. While the 2023 Eurostat yearbook shows that Calabria is among the top four regions in Europe with the highest share of people at risk of poverty and social exclusion.
For Consiglio, it becomes essential to use the provision funds also with a savings function, so as to «guarantee citizens’ tax debts. If the problem is collection – highlighted Consiglio – we use part of our savings to help with this collection”. The manager wondered whether municipalities are complex organizations and, answering positively, recalled how there had never been a “verification of the adequacy of the administrative structure which should be carried out mandatorily by the State”.
From the Pnrr to new opportunities, here are the main challenges facing local authorities
The conclusions were entrusted to Andrea Ferri, Local Finance Manager of the IFEL Foundation and Anci. «The municipalities – she explained – as a whole represent a healthy sector of public administration. We produce credit but not net debt for the State. We do not increase the public debt and we rely on largely our own revenues, which are very differentiated across the territory.” To date, Ferri remarked, there are 450 full-blown crises and 1300 municipalities in which a convergent initiative has been launched.
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«The report – he added – was born in the last decade with an analysis of the current crisis. Today it has evolved multidimensionally. A project was activated to support several dozen municipalities in conditions of instability and crisis. This is part of our mission and makes us understand a fundamental thing in general: to resolve this fragility, a minority but important with almost all the medium-sized cities in the south involved, which integrates with a theme of general fragility of the municipalities, it is necessary to find equalization mechanisms radically different that take into account a very important inequality of resources. Our equalization is formalistic, “statistical”, based on engineering data. All beautiful and true, but ultimately ineffective. The reminder that comes to us from the constitutional court with sentence 115/2020 is that the crisis is also the result of a structural weakness. We are still not intervening enough on this, which mainly concerns the South and internal areas. When we understand, as a country system, that this is an element of strength for the whole country, as demonstrated by the Pnrr investments, we will make a strong contribution to the economic stability of public finances”.
