Research On Legal System Of Local Government Debt Crisis Disposal

From the perspective of historical experience,local government debt is almost an inevitable choice in the process of industrialization and urbanization.It is certainty that the reasonable and appropriate debt of local governments is conducive to promoting social and economic development.However,excessive debt will lead to the accumulation of local government’s debt risk.Once the risk accumulates to an uncontrollable situation,it will not only directly affect the interests of debt creditors in local government,but also trigger local financial crisis,resulting in the sound operation of the fiscal system impacted,a negative impact on the credibility of the government and even the bankruptcy of government due to the serious debt crisis.Thereupon,many foreign countries and regions have established the legal system of local government debt management,but it has not been able to prevent the occurrence of debt crisis for various reasons.In order to deal with the debt crisis,many countries and regions have established this legal system successively.In China,since the reform of tax-sharing system,the gap between the financial resources and expenditure responsibility of local government has become wider and wider.Under the double pressures of economic downturn and land policy contraction,debt-raising seems to be an effective means for local governments to fill the short-term financial gap.Especially according to the provisions of The Budget Law of the People ’s Republic of China(hereinafter referred to as The Budget Law)revised in 2014,the creditor’s rights given by our local governments is limited,which makes the issuance of local debts to be a normal state.In order to regulate the debt-raising behavior of local governments,the State Council has issued a series of normative documents.Among them,The Emergency Response Plan for Local Government Debt Risk(hereinafter referred to as The Plan)is the first legal system for the disposal of local government debt crisis with the local financial restructuring system as the core.In terms of the system itself,this proactive institutional arrangement is not only a powerful measure to implement regulations and further strengthen local government debt management,but also a key policy to prevent and mitigate major risks.However,as far as the institutional structure is concerned,the provisions on the disposal of local government debt crisis on The Plan are too rough to be operated in practice and the appropriateness of some provisions is worth considering.Therefore,it is necessary to conduct in-depth study on the legal system of local government debt crisis management.Realizing the implement of local government’s financial responsibility is a essential requirement of the disposal legal system for local government’s debt crisis.Therefore,defining the scope of local government’s financial responsibility is the starting point of this disposal system.Fiscal right is a necessary condition for financial responsibility.Local governments should decide their financial responsibility according to different contents of fiscal decentralization.The debt repayment obligations not undertaken by local governments needs to be borne by the main body with financial rights.However,due to the confusion caused by different responsibilities,the necessary rules should be adopted to mitigate its impact to the greatest extent.To clarify the disposal rules of local government debt crisis is the guarantee for the legal system in playing an effective role.Generally speaking,the rules include the establishment of responsible subjects,the initiation and withdrawal of debt crisis disposal mechanism,as well as the preparation,approval and implementation of debt restructuring plan,each of which contains a number of relevant rules so that a comprehensive and in-depth study is needed.Firstly,we should make clear of the way in dealing with the debt crisis of local governments in our country.From the outside,there are three dominant paths:administrative,judicial and mixed dominance.Under the circumstances of strong administrative power in our country,we should adopt the administrative leading mode and establish a comprehensive power organization with administrative organs as the main body and legislative organs as the supplement.Secondly,we should clarify the criteria for the initiation and withdrawal of the management mechanism for local government debt crisis.Specifically,it includes two aspects:substantive judgment standard and procedural judgment standard.Debt statistics index is taken as substantive criterion and the composition and dissolution of responsible subjects is taken as procedural criterion for mechanism initiation and withdrawal,so as to clarify the judgment standard.Finally,by drawing lessons from the relevant rules of debt restructuring plan in enterprise bankruptcy system,the specific rules should be established to follow in the process of compiling,approving and executing of debt adjustment plan.Resolving conflicts of interest is an important part of the legal system for dealing with debt crisis of local governments.The purpose of the system is to realize debt repayment on the basis of guaranteeing the necessary livelihood expenditure and maintaining the operation of the government.Therefore,the public and creditors are the main groups in the interest battle of the legal system.However,in the pursuit of maximizing their own interests,conflicts of interest is inevitable.Through weighing the ranks of legal interest among various interests,the priority order of interests should be clarified,supplemented by each interest subject can own the right of defense.Even if the actual equality of interests can not be achieved,the procedural equality of interests can be guaranteed at least,so as to achieve the purpose of conflict resolution.Crisis disposal of local government debt is not an independent matter.The operation of its system is also depends on the support of other mechanisms.However,the existing supporting mechanisms in China are not perfect.In order to ensure the efficient operation of the legal system,we should build a complete supporting mechanism:improve the debt management mechanism of local government through comprehensive early warning indicators to provide necessary data support for crisis disposal;clarify the responsibility of information disclosure in the process of local government debt disposal to strengthen the supervision in the debt disposal process;enrich the source of local government’s self-financing so as to provide the greatest financial support for debt disposal.At present,the United States,Japan,the European Union and other countries and regions have established a relatively systematic legal system for the disposal of local government debt crisis,which provides a reference for the improvement of the legal system in China.However,as the implementation of this debt crisis management system is highly depends on the operation of legal system and different countries and regions has different legal system,our country can not copy the existing legal system of local government debt crisis management.We can only analyze the common ideas and rules in the legal system of different local government through the deconstruction in management mechanism of local government debt crisis.Thereupon,we should determine to establish a legal system which is suitable for debt crisis disposal of local government by drawing lessons from these key points and the supplement of the relevant legal system in China.