In the past two years, the debt of Italian local administrations—including municipalities, provinces, and regions—has been reduced by €7.1 billion, equivalent to 6.1%. This stands in sharp contrast to the central state’s debt, which grew by €229 billion (+8.6%) during the same period. The analysis by Unimpresa’s research center highlights the financial management gap between local and central authorities, demonstrating that a more focused and responsible approach can yield significant benefits.
The reduction in local government debt
Municipalities, provinces, and regions implemented policies of rationalization and spending control, achieving consistent debt reduction.
- Regions: Debt decreased from €39.38 billion to €37.25 billion, with an average monthly savings of €88 million.
- Provinces: A 6% reduction brought debt from €5.72 billion to €5.37 billion.
- Municipalities: A drop of €2.16 billion, equivalent to 6.6%, reduced debt from €33.04 billion to €30.88 billion.
- Other local entities: Total deficit fell from €10.74 billion to €9.83 billion, marking an 8.4% decrease.
This trend underscores improved management of public resources, particularly in areas like healthcare, transportation, and infrastructure.
Central state debt growth
In contrast to local entities, the central state saw significant debt growth, increasing from €2.669 trillion to €2.898 trillion between 2022 and 2024. This growth is attributed to:
- Rising costs associated with public debt interest.
- Extraordinary expenses to address global economic crises.
- A lack of structural reforms to enhance public spending efficiency.
The disparity between the two levels of administration highlights the urgent need to rationalize the state budget, drawing lessons from local entities.
Differentiated autonomy as a tool for improvement
According to Unimpresa president Giovanna Ferrara, differentiated autonomy should not be viewed as a threat but as an opportunity to encourage more efficient resource management. The results achieved by municipalities and regions show that increased decentralization, if managed with caution, can lead to more responsible financial practices.
Ferrara emphasizes that:
- Spending rationalization is key to reducing debt without compromising essential services.
- Collaboration between the state and local administrations can improve fiscal sustainability and restore public trust in institutions.
Conclusion: learning from local entities
The virtuous performances of local entities in Italy serve as a benchmark for the state budget. The differentiated autonomy reform, if implemented effectively, could rebalance public debt management, leveraging the best practices already in place at the local level. Only through coordinated and responsible action can a sustainable future for Italian public finances be ensured.
