Financial Security of the Public Sector Versus the Indebtedness of Local Self-Government

Abstract

The 19th and 20th century in the history of Poland was primarily a time of foreign domination by neighbouring countries, mainly Russia and Germany. Except for the inter-war period of 1918–1939 when there was an attempt to rebuild an independent country, Polish culture in its social and economic dimension underwent a vicious destruction for almost 2 centuries. For that reason, political changes initiated in Poland in 1989 resulted in the emergence of new hope for the revival of its sovereignty and its restoration as a sovereign and democratic country. After years of enslavement the regenerated Poland was economically weak in almost all its dimensions. Due to decisions made in the 1990s and the first years of the 21st century there was a hope for a clear acceleration of social and economic growth. The activities required the necessity of implementation of economic and rational procedures in financial management as well as the allocation of huge financial resources mainly for investment in the area of public utilities, and also for the implementation of modern technologies and methods in nearly all areas of economic and social life. The article is dedicated to the problem of the financial security of the country in relation to the burdens of debt of local authorities, particularly those at the lowest level of the governance structure of the country. Assuming that local authorities in the Polish legal system are public-legal unions equipped with a legal identity that act in their own name and at their own responsibility, it is the members of organisations who are directly responsible for an excessive indebtedness which can affect not only the financial security of the whole public-legal union which is a local self-government, but also the financial security of citizens.