Local Authorities and Public Finances: Between Administrative Autonomy and the Demands of European Union Economic Governance

Local authorities in Portugal have played an important role in the development and dynamization of the territories. Since its constitution, through the strengthening of its powers with the revolution of April 25, 1974, to more recent times, local power has managed to adapt to the realities of the times, greatly influenced by constant popular pressure, as a result of the proximity that they have with the people. It is in this context that this study intends to develop the role of local authorities and their impact, with current legislation, particularly regarding the powers attributed at the level of local and regional finances, emphasising the need to reconcile constitutional autonomy with the financial constraints imposed by European Union economic governance. The impact of the European Union's economic governance on the fiscal responsibility of local authorities is also addressed, demanding greater budgetary rigour and compliance with EU criteria. The paper argues that strengthening legal and financial instruments for municipalities is essential to achieving a balanced multilevel governance framework in Portugal. The importance of effective coordination between levels of government is emphasised, promoting a balance between local autonomy and the financial discipline imposed by the European legal framework.