The following text is published with permission from the Council of Europe.
This paper recommends to Council of Europe Member States to invite local and regional authorities to a) resort to borrowing only for the purpose of funding expenditure on capital investment, re-scheduling of current debt or financing short-term cash shortages; b) ensure that the repayment of loans, including the payment of interest, can be covered from current revenues, and consequently see to it that the depreciation period is not longer than the life-span of the asset(s) financed by the loan in question; c) envisage the creation of a loan pool for the combined financing of the expenditure mentioned in item.