By law, local authorities must balance their budgets (i.e. they cannot run a budget deficit). The amount of operating incomes must be higher than the amount of operating expenditures and by law, local authorities must balance their budgets (i.e. they cannot run a budget deficit). Local authorities can only borrow funds in order to finance their investments—this is known as the “golden rule” (Box 1.8). In 2013, borrowing by local authorities in France amounted to 7.3% of total revenues (at EUR 229.6 bln) (Government of France, 2016).