On 18 June, the Ministry of Finance announced that municipalities had increased their debt to CZK bln 82.4 in 2011. The increase is about CZK bln 1.2 from year to year and comprises mainly of bank credit provided by commercial banks. The municipal authorities use the financial means primarily to construction of basic infrastructure. Interestingly enough, the smallest municipalities show balanced budgets. The most indebted municipalities are Prague, Brno, Plzen, and Ostrava; the share of their debts on the whole municipal debt is 46.6 %. Since 2010, the central Government has been limiting the financial means provided to municipal authorities by the state budget (a decrease has been shown in 2011 as well); therefore, the increase of the debts may results from an imbalanced financial inflow to municipal budgets.
Source: Ministry of Finance – Report on municipal budgets debts.