Impact of EU Funds on Financial Autonomy of the Krakow Municipality in the Years 2007–2013

Abstract

Joining the European Union by Poland made it possible for municipalities to acquire resources from the EU funds in order to finance its current and capital expenditure. The objective of this article is to present the impact of the EU funds on financial autonomy of the Krakow municipality in the years 2007-2013. However, the impact of revenues from the EU funds on the municipality’s financial economy is twofold. On one hand, the revenues from the EU funds improve its financial autonomy, by supplementing the shortage of own resources, on the other hand, to be granted subsidy from EU funds the municipality is required to provide its own contribution, thus increasing its debt. This article notes the need to strengthen the mechanism of self- governance and responsibility in the management of municipality’s property in the face of tightening the principles concerning the level of permitted debt of municipalities and the need to assure continuous investment policy.