By Euro Weekly News Media • 08 November 2011 • 9:46
Photo of Iranian President Ebrahim Raisi.
Credit: Wikipedia By Tasnim News Agency, CC BY 4.0, https://commons.wikimedia.org/w/index.php?curid=58384533
MANY of the 506 local authorities within the Valencia Region are on the verge of being insolvent, a Generalitat Valenciana report reveals.
Despite nearly 20 boom years in terms of foreign funds coming into the region on the back of soaring house prices, it seems the local public economies have done little to protect themselves against the predicted downturn that has kicked in over the last three years.
Those with the greatest debts are the coastal towns where the boom was greatest and the crisis felt the deepest.
Recently released figures show the current debts of the following towns: Benidorm and Alicante at around €3.8 million; Elda €4.3 million; Finestrat €6.9 million; Altea €15.8 million; and Villajoyosa with €19.8 million.
The most indebted communities in the Valencia region are comprises mostly of the Alicante Province, where the burst in the tourist bubble has been felt the most.
One hundred and fifty councils submitted negative accounts last year, meaning that technically they were unable to meet their current spending obligations. In the southern Costa Blanca, the town of Guardamar recently recorded a debt of near €18 million.
The consequences of council’s having such precarious finances are the obvious ones of staff reductions and cuts in services, as well as for example in Guadarmar, the defaulting on debts owed to private suppliers, such as that of €800,000 apparently owed to the company handling refuse for the town.
The knock on effects of poor or absent long term financial planning by local authorities over decades will now be felt by many.
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