Wednesday, 8 May 2013

Andalucía holds most councils in debt

(Illustration only)
ANDALUCÍA One of the many reasons for the disastrous conditions of the nation's finances is in the indebtedness of its municipalities (by municipality read council). One example, offered in an article on the subject in El País, is a village in the province of Burgos: population 48 (yes, no zeros missing); debt: €8,520 per head. It is the most indebted council in Spain, just above another village in Barcelona that runs a debt of €8,344 for each of its inhabitants. There are 8,116 municipalities in Spain, and almost all of them went haywire with expenses and building and other investment when 'the cows were fat' (a good old rural expression). Two of the highest are in Andalucía:>>>
Jaén, a provincial capital, and Jerez de la Frontera, the well-know sherry town. Many others have received government loans to pay suppliers, which, while obviously meaning considerable relief to these mostly small or medium-sized business, has put the councils' debt ceiling into the stratosphere. The percentages by which the debt rose are a macabre dance of figures. The average is considerable: overall, up by 18% to almost €42 billion. But averages are merely actuarial figures. 

One example, says El País, is Estepona, whose debt climbed by 382% in a single year.

Much of the original debt went into building sports facilities, convention centres and other public buildings - some of which included airports that have yet to have a landing or take-off on the premises. This, of course, was inside the famous building bubble that got Spain into so much trouble. When it burst, municipal coffers registered downturns in income that may never be seen again. That, and the need to make their own drastic cutbacks in facilities their inhabitants have become used to. The result of the last elections in 2011 was a show of their discontent.

At the time, employment was at a low (for Spain) 7% to 8%. But children left school early to make 'fortunes' in the building trade - and are now stuck for several years with impossible debts on fast new cars, amongst other consequences. They face a dismal future all round.

Many cities were subject to what El País rightly calls feckless management. But not all. Good management examples are Bilbao, where the per capita debt is a mere six euros and a few céntimos. Others are Barakaldo, Leganés, Dos Hermanas (in the prov. of Sevilla), Vigo, Fuenlabrada and Badajoz, all of whose residents would have to pay up a maximum of €225 each.

In fact, the official figures show that 671 of the total 8,116 councils have a per person debt of under €100. Most, if not quite all, though, have a population of less than 1,000. Figures can often create a false concept, and the often do.

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