The presidency of the Council was achieved by an injunction from the court of Rome, after the failure to pay a private debt towards a municipality in difficulty. The decision comes following the rulings of the European Court of Human Rights (ECHR) which at the beginning of 2025 established that the State was the ultimate guarantor of the debts of insolvent local authorities.
The case arises from a series of appeals presented by companies that were unable to recover the sums owed by the municipalities or by investee companies that ended up in bankruptcy or liquidation. The ECtHR instead recognized that non-payment violates property rights and the right to due process, requiring the Italian State to pay the debts within 90 days. A deadline which in this case was not respected and led to further steps, up to the payment of the expected 103 million euros.
The ECHR ruling: what was established
It all starts with commercial credits accrued by private companies from various Italian municipalities declared in financial difficulty. When a municipality finds itself in these conditions, it is no longer possible to recover the figures and businesses are left empty-handed. In this case they turned to the Court of Human Rights for justice.
After a decade, the ruling finally arrived in January and then in March 2025. This established a historical principle: when a local authority does not pay its creditors, the responsibility falls on the central State, which must guarantee respect for fundamental rights.
The ECtHR therefore established that:
- failure to pay a public authority is a violation of property rights;
- in the event of an unexecuted sentence it also violates the right to a fair trial;
- the State is obliged to pay off debts within 90 days.
The state paid over 100 million euros
The ruling came in January 2025, but the state did not pay within the established 90 days. So the law firm turned to the Rome court, which on 30 September allowed, through an immediately enforceable injunction against the Prime Minister, the payment of one of the credits. This exceeds 100 million euros, to be precise 103 million euros.
The consequences for the state
The decision was considered “historic” because in Italy today there are 120 municipalities and provinces in bankruptcy and over 5000 investee companies, of which around 1000 are in liquidation. This is an enormous amount of uncollected debts which could turn into direct economic claims against the State.
Now that the State is responsible for the debts of local authorities, because it represents the unity of public administration in terms of the protection of rights, if a Municipality goes bankrupt the creditor cannot be deprived of his right due to the financial inability of the Municipality and the State will pay.
We therefore expect avalanches of requests similar to the one already paid. There are many appeals pending. According to estimates, there could be a hole to be remedied amounting to tens of billions of euros. The risk, according to experts who have read the sentence, is that the State, if it does not pay promptly, risks foreclosures by creditors.
For businesses, this is the first real tool to recover money that has been stuck for years in the midst of the bankruptcy of public bodies. The Prime Minister now has 40 days to prepare an opposition to the injunction, which however remains enforceable.
