Introduction: debt, deficits and austerity -- We must live within our means -- Governments must balance their books -- We must tighten our belts -- Don't go into debt -- Taxes are a burden -- Austerity: there is no alternative -- Always an alternative.

The paper deals with the problem of municipalities’ fiscal distress and its diagnosis. The study examines the key financial indicators of Polish municipalities located in the West Pomeranian Region and uses them to build an aggregate measurement to identify the level of these municipalities’...