Most municipalities will cease to burden Greece?s public finances from next year as they will have to balance their budgets, Interior Minister Haris Kastanidis said on Thursday.
Local government has been a considerable drain on public finances and in July, the International Monetary Fund only approved a 3.2-billion-euro loan tranche after Athens agreed to cover the cost of large loans taken out by the municipalities of Zografou and Acharnes.
?From the start of 2012, municipalities will not add to the public deficit because they will have to balance their budgets,? said Kastanidis. It is thought that 15 of the 325 municipalities are heavily in debt and that another 70 will need to be inducted into a longer-term program to balance their expenditure and revenues, which will include the local authorities agreeing to new terms with their creditors.
Kastanidis also said municipal employees would be transferred to other public sector departments rather than placed on labor reserve as part of the civil servants? shake-up.