The Management of the Financial Collapse of Local Bodies and its Economic Impact: The Case of the Municipality of Taranto
The Management of the Financial Collapse of Local Bodies and its Economic Impact: The Case of the Municipality of Taranto
The present work aims to offer a contribution to evaluate whether to adopt strategies based on state support or, alternatively, on the managerial autonomy of local bodies in financial trouble. The research, after analysing the main guidelines at European level, presents the results of an empirical investigation on the economic effects produced on local economy by the financial default of the Municipality of Taranto. The choice of the Municipality of Taranto is due both to the significant magnitude of the ascertained debt, which was one of the highest in the history of Italy, and to the considerable economic effects caused by the recovery procedure. Specifically, with reference to the companies admitted to the passive mass, we determined, firstly, the economic losses they suffered and, secondly, we took into consideration the survival state and the strategies adopted by the companies involved in the insolvency procedure which were located in the local area of reference. From this work can be drawn some major conclusions. In general, it can be said that the relevant legal standard proved to be ineffective, as it does not define the recovery ways and the timing for the closure of the procedure. In particular, it does produce relevant economic effects on local enterprises, only in part mitigated by the diversification strategies adopted by the enterprises.Key Words: local bodies; financial default, economic effects