How many Italian municipalities are in financial difficulty? The last photograph available is that of the Autonomy Section of the Court of Auditors, which with Resolution no. 15/SEZAUT/2026/FRG approved the Report to Parliament on Municipalities in a situation of financial crisis, updated to 31 December 2025.
The framework outlined by the accounting judiciary shows that crisis situations are not generalized within the Italian municipal system, but present a strong territorial concentration and, above all, highlight difficulties in the path of budget recovery.
How many municipalities are in financial crisis
As of 31 December 2025, there were 485 active procedures, referring to 484 entities, equal to 6.1% of Italian municipalities. The number includes both the bankruptcy procedures and the multi-year financial rebalancing procedures. It is therefore not a question of 484 Municipalities all formally in bankruptcy.
In fact, the Court of Auditors’ report highlights that, since the introduction of the instruments currently in force, a total of 1,448 procedures have been activated, relating to 1,033 Municipalities: 818 failures and 630 rebalancing procedures.
The data allows us to distinguish between the different phases of the crisis. Insolvency represents the most serious situation, while multi-year financial rebalancing is a tool through which the institution attempts to reorganize its accounts, avoiding, when possible, arriving at the declaration of insolvency. As regards the procedures still underway, the Court of Auditors lists 227 active failures. This, therefore, is the data to use when talking specifically about municipalities currently affected by a bankruptcy procedure, while the 484 entities represent all the administrations involved in the crisis procedures that are still active.
Overall, full-blown crisis situations affect around 6.5 million inhabitants, while the estimated passive mass reaches 6.2 billion euros.
The problem of rebalancing that leads to disruption
One of the elements highlighted by the Court of Auditors concerns the actual ability of the rebalancing procedures to bring municipal budgets back to a stable financial condition.
According to the report, only 16.1% of the rebalancing initiated has been formally concluded. A particularly significant figure, however, concerns the share of procedures that failed to achieve the initial objective: 35.2% of the rebalancing resulted in failure. Even the data relating to 2025 alone shows this difficulty. Of the 23 failures declared during the year, 14 had been preceded by an unsuccessful rebalancing procedure.
Rebalancing, therefore, is not always able to function as a tool for preventing disruption. In a significant part of the cases the recovery process does not allow the financial equilibrium to be recovered and the institution ends up being declared insolvent anyway.
Disturbances that are too long: the crux of the times
Another critical issue concerns the duration of the procedures. The Court of Auditors notes that, since 2007, only 17.1% of the failures were concluded within the expected five-year period. However, 99 out of 227 disasters are still active and have exceeded this duration.
The problem, according to the accounting judiciary, is not just that of administrative times. The prolongation of the procedure may in fact affect the entity’s ability to return to a stable and lasting condition of financial equilibrium. The duration of the recovery therefore becomes one of the indicators through which to evaluate the overall functioning of the tools envisaged to deal with crises in local authorities.
Sicily, Calabria and Campania concentrate most of the crises
The phenomenon has a marked territorial characterization. Sicily, Calabria and Campania collectively account for 63.6% of the procedures activated and as much as 80.4% of the failures declared in the last five years.
The percentage of municipalities that have experienced at least one crisis procedure is particularly high in some of these regions. In Calabria the share reaches 54% of the Municipalities, in Sicily 41% and in Campania 39%. The geographical distribution is therefore very far from a uniform situation across the entire national territory.
The Court of Auditors underlines that, in the areas most affected by the crises, it would not be sufficient to attribute the phenomenon to the management of the individual Municipality. In fact, a series of economic, social, organizational and institutional factors come into play which concern the entire system of local authorities. The responses adopted by the Regions are also very different from each other: they range from financial support to technical assistance, through prevention funds and autonomous monitoring systems.
The Court of Auditors calls for a reform of the rules
A broader question therefore emerges from the report: that of the effectiveness of the current financial crisis management system of the Municipalities. The Court of Auditors recalls the need for an organic reform of Title VIII of the Consolidated Law on Local Authorities (TUEL), with the aim of overcoming a model considered predominantly reactive and uniform.
The idea indicated by the accounting judiciary is to intervene before the financial imbalance becomes a full-blown crisis, shifting attention from emergency management to prevention. Among the proposals indicated in the report there is also the integration of the BDAP and SIOPE+ databases within a national archive of critical issues. This should be accompanied by the use of more transparent, differentiated and predictive indicators, linked directly to the budget cycle.
The objective is to identify signs of difficulty more in advance, preventing public intervention from arriving when the financial situation of the institution is already compromised.
