Authors: Maria Tolika, Dimitrios Ktenidis

Title: Financial autonomy of the Greek municipalities: The case of the municipality of Thermi

Abstract

Greece is traditionally a country with a central government which possesses strong administrative powers. During the last decades, regional and local governmental institutions have acquired various responsibilities. Although there have been many discussions concerning the financial autonomy and independence of the local governments, their main source of income still remains the annual subsidy from the central government. During the recent years, this amount is getting more and more reduced due to the financial crisis. The municipality of Thermi is a middle-sized local government institution, included in Thessaloniki metropolitan area. Its budget for 2018 amounts to 53 million euros. This is of great interest taken account that the budget of the former Municipality of Thermi only in 2010 (before the amalgamation)reached the amount of71million euros.In this research, we explore the fluctuation of the revenues and the expenditures of the Municipality of Thermi during the last 5 years in addition to the changes in the legislative framework. Our main research questions are the following:1) Is it possible for a middle-sized municipality to find alternative sources of income, and to achieve a certain degree of financial autonomy taking into account that the central government annual subsidy is steady or declines?2) Which are the activities in a local level that are influenced by the current recession?For this purpose, we use comparative yearly data from the annual budgets and we highlight the main changes of the municipality administration policies because of the severe financial reality.