Costa Blanca councils verging on bankrupcy

APPROXIMATELY 15 per cent of the municipalities of the Valencia Region are at “serious risk of going bankrupt this year.”

This was revealed by the President of the Valencia Federation of Municipalities and Provinces, Elena Bastidas.

Many already have trouble paying their staff: Náquera for instance, just outside Valencia could not make all its December wage obligations.

Latest figures published by the Bank of Spain show some €5 billion of debt crippling the Valencian region’s local authorities, with banks being owed some €3 billion, suppliers €2 billion, and central government €391million in respect of advances made in 2008-9. As with most businesses, the major ongoing outlay is on staff costs, and when cutting back this is the first point of referente i.e. staff cuts.

In Valencia Region there are approximately 60,000 persons employed by local authorities. The City of Valencia itself, with some 5,000 employees, has signed an agreement that guarantees their jobs.

Though if wages are not paid, the retention of a post is meaningless for practical purposes.

Throughout the region, local government has been a victim of the collapse of revenues derived from the housing slump, which until until 2008 was the main sources of income, combined together with some outrageous budget expenditure based on the false model of continuingly increasing prices and ongoing construction projects.

The allocation of funds known as Plan E, with which the Central Government and the Regional Government sought to boost employment through works in the municipalities, reveals the extent to which the crisis disrupted public resources, by reckless expenditure on infrastructure of doubtful profitability.

Navajas, a small town located in the Castellon region of Alto Palencia, is the population of Valencia with most debt per capita, with a total of €3,396 for each of its 816 inhabitants, according to the Ministry of Finance and the National Institute of Statistics.

Despite the tiny size of this town/village, it has a municipal auditorium to house concerts, and before the last elections, began construction of a municipal sports center, which languished after the recent elections.

Besides Navajas, the towns of Cofrentes (€1,429) and Monforte del Cid (€1,082) share the dubious honor of being the most indebted per capita in the Valencia Region.

However, this behaviour is not confined to the villages. Big cities like Elche, are among the largest cities in the red of Spain. For instante here, the case of The Carrús heated swimming pool, where the municipality spent €2.9million from the Plan E.

Paddle tennis fever has gripped Spain, and there is hardly a municipality in the Marina baixa area which does not boast a new paddle court complex.

Photo credit: Visentico / Sento