Municipal finances in unitary systems: the effects of crises on financial autonomy in four European countries

The goal of this chapter is to explore how fiscal crises have affected municipal financial autonomy in the unitary systems of European countries over the past decade. In particular, we focus on the following set of questions: 1) Did the experience of a fiscal crisis (from 2008 onwards) lead to increased centralization and reduced municipal autonomy or rather to increased decentralization? 2) What kinds of changes in fiscal rules pertaining to municipalities’ ability to borrow and incur deficits were triggered by the fiscal crisis/period of austerity? 3) How have the fiscal rules been affected by the Covid-19 pandemic? We will examine these questions by looking at developments in four small unitary states: Denmark, Estonia, Portugal, and Ireland.