Local authorities that fail to abide by the measure will not be able to access their treasury accounts for payments other than those for wages, to reduce arrears and ensure food for people in social assistance centers and hospitals, reads the document.
After they cut arrears by 85%, local authorities must further reduce debts by at least 3%-5% monthly. City halls breaching the measure will not receive funds from income taxes and other budget sources.
At the end of 2012, local governments registered debts to goods and services providers of over 800 million lei (EUR182.4 million).
However, the government allows local authorities to contracts 5-year loans from the state treasury by March 29, 2013. The overall sum that may be borrowed is capped at RON800 million. The money will be used to pay off arrears.
The number of Romanian city halls without arrears (debts overdue by more than 90 days) is extremely low. (EUR1=RON4.3853)