The ministry of finance has estimated that the impact of the coronavirus pandemic on the grand duchy’s communes will take a financial hit of some €418 million in 2020.

But interior minister Taina Bofferding (LSAP) said in a statement on Thursday that municipalities are not likely to go bankrupt. “Municipalities…will always be able to pay their staff, their bills and rents and to answer for their debts. Unlike other countries, we have mechanisms to prevent insolvency.”

These include ensuring that operating expenses must always be lower than operating revenues, and that annual repayment of all borrowings must be less than 20% of operating revenue.

But Bofferding also underlined that public sector investment, including by municipalities, must continue, “not only to thwart the economic recession, but above all because it is essential for the development of our society.”