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Investitionen und Kommunalfinanzen nach COVID-19

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Präsentation von OECD-Experte Rüdiger Ahrend im Rahmen eines Webinars des OECD-Berlin Centre am 16. Sepetember 2020

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Investitionen und Kommunalfinanzen nach COVID-19

  1. 1. TERRITORIAL IMPACT OF COVID-19 CRISIS ON SUBNATIONAL FINANCE IN OECD COUNTRIES Rudiger Ahrend Head of Division, CFE/OECD Rudiger.Ahrend@oecd.org
  2. 2. © OCDE | The territorial impact of the Covid-19 crisis: managing the crisis across levels of government 2 Differentiated territorial impact of COVID-19 crisis Differentiated impacts Health Economic Fiscal Social • Municipalities and regions are at the frontline of managing the crisis • The impact is asymmetric within countries, between regions and local areas – in the health, economic and fiscal impacts of the crisis. The maps of the various impacts do not coincide England Metropolitana (Santiago) Daegu Quebec Hovedstaden Canterbury Flandre New South Wales Lombardy Stockholm Île-de-France Tokyo Community of Madrid Prague Bavaria New York Vienna Noord-Brabant São Paulo Bogota D.C. Mazowieckie Ciudad de Mexico Ticino United Kingdom Chile Korea Canada Denmark New Zealand Belgium Australia Italy Sweden France Japan Spain Czech Republic Germany United States Austria Netherlands Brazil Colombia Poland Mexico Switzerland 0% 20% 40% 60% 80% 100% national COVID-19 fatalities country mean highest Regional share of fatalities linked to COVID-19 within countries
  3. 3. © OCDE | The territorial impact of the Covid-19 crisis: managing the crisis across levels of government Fiscal impact of covid-19 on subnational governments Scope and type of spending responsibilities Characteristics of subnational government revenues (sensitivity to economic fluctuations) Fiscal flexibility Fiscal health Scope and efficiency of support policies from higher levels of government Differentiated impact on subnational government finance: 5 main factors
  4. 4. © OCDE | The territorial impact of the Covid-19 crisis: managing the crisis across levels of government Spending and revenues strongly affected SPENDING 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% EST LTU SVK MEX NLD TUR AUT GBR IRL GRC BEL ITA KOR POL AUS HUN LUX OECD36 (UWA) DNK NOR ESP EU28 SVN ISR PRT CHL OECD36 (WA) CZE FIN JPN USA NZL SWE CAN FRA CHE DEU LVA ISL Taxes Grants & subsidies Tariffs and fees Property income Social contributions 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% NZL GRC IRL ISR ISL FRA LUX TUR GBR DEU SVK KOR NLD HUN BEL PRT LVA CHE OECD33 (UWA) JPN SVN NOR EU28 CZE EST POL OECD33 (WA) LTU DNK AUS USA AUT SWE ESP FIN ITA Health Social Protection Education General Services Economic Affairs Defence Public Order Housing and Community Recreation, Culture and Religion • Increase spending (particularly health, social protection, local economic development) • Impact varies a lot depending on spending responsibilities REVENUE • Large drop in revenues • Shock more significant than for expenditure • Impact varies a lot depending on the structure of revenues • Tax revenues and user charges may be strongly impacted • Tax revenues: impact in 2021 and 22
  5. 5. © OCDE | The territorial impact of the Covid-19 crisis: managing the crisis across levels of government Main risks Subnational finance  Scissor effect >> Increased deficits and short and long-term debts  Fiscal consolidation plans in the medium term, leading to:  cuts in public investment, which could undermine the recovery  cuts in social expenditure, which could affect even more vulnerable populations 96 97 98 99 100 101 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Metropolitan regions =100 Metropolitan regions Non-metropolitan regions with access to a metropolitan area Non-metropolitan regions with access to a small/medium city Non-metropolitan regions far from a metropolitan area Growth indexRegional economies  Difficulty for subnational governments to participate in recovery plans, support local economies and SMEs  Focus on short term priorities and not on resilience  Amplification of pre-existing trends, increase of regional disparities
  6. 6. © OCDE | The territorial impact of the Covid-19 crisis: managing the crisis across levels of government 6 Supporting SNG finance Vertical coordination mechanisms • Budgeting and accounting • E-financial management • Financial analysis • Fight against fraud, etc. • Local public companies • etc • Relaxing spending rules • Easing spending responsibilities • Temporary reduction of employer's contributions VAT exemptions • Public procurement • Grants & subsidies • Rainy day funds Expenditure- side measures Revenue -side measures Fiscal rules & debt Financial management • Relaxing budget balance rules • Relaxing debt rules • Easing access to borrowing • Equalisation mechanisms • Tax arrangements • Compensation schemes o Intergovernmental fiscal dialogue o Shared and agreed data o Assess and adjust More than two third of OECD countries have adopted measures to support SNG finance
  7. 7. © OCDE | The territorial impact of the Covid-19 crisis: managing the crisis across levels of government 7 Take aways (1): For national governments • Continue supporting subnational finance and facilitate SNGs’ involvement in the recovery • Avoid mistakes from the past: subnational public investment should not be the adjustment variable • Stronger fiscal coordination across levels of government is necessary • Provide some room for manoeuvre in certain countries e.g. soften strict fiscal and debt rules and facilitate access to borrowing • National recovery strategies need to have (i) a territorial dimension (ii) integrate structural priorities like climate in today’ strategies (iii) be sustainable
  8. 8. © OCDE | The territorial impact of the Covid-19 crisis: managing the crisis across levels of government 8 Take aways (2): For regions and municipalities • SNGs need to contribute to economic recovery strategies (SMEs and public investment as key priorities) • Regional governments and large cities are particularly well placed to support the economic recovery due to their scale and areas of responsibilities • Regions and municipalities need to diversify sources of funding • SNGs need to mutualise risks and expertise, notably for borrowing and procurement • Quality public investment needed: avoid fragmentation, target a few strategic priorities • Balance infrastructure investment with public investment in skills development, innovation, R&D, etc., as part of public investment strategies. - Diversify sources of funding SMEs Scale Recovery strategies Quality public investment Long- term Sustain ability
  9. 9. © OCDE | The territorial impact of the Covid-19 crisis: managing the crisis across levels of government • COVID-19 is challenging all types of government – national, regional and local– to be better prepared for future shocks, regardless of their nature • Long term priorities need to be considered today, and integrated in the responses to the crisis (climate, digital infrastructure, more balanced regional development) • This calls for rethinking governance and fiscal systems for greater regional resilience 9 Take aways (3) Building resilient regions Rethinking regional development policy/fiscal tools (better address inequalities) Rethinking multi-level governance systems and sources of financing Strengthening strategic, institutional and financial capacities of regions Clarifying the assignment of responsibilities, asymmetric approaches Capitalising on the role of SNGs to build trust with citizens Strengthening institutional and fiscal coordination – vertical & horizontal
  10. 10. Thank you For more information www.oecd.org/coronavirus Rudiger.Ahrend@oecd.org Link to the paper: oe.cd/il/2X6

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