The National Government of Spain has announced a plan to which 518 municipalities, all with financial problems, will be offered the chance to clean up their accounts in exchange for tough austerity measures.
The Secretary of State for Finance, Antonio Beteta, made the offer after the meeting of the National Commission for Local Administration in Spain, the CNAL, where he said that of the current 8,117 municipalities in the country, 518 of them meet at least one of these conditions for assistance, that they have a negative cash balance, negative general expenditure or outstanding debts to the government.
Of the 518 qualifying councils, the majority, with a total of 112, are in Andalusia, followed by Castilla La Mancha with 94, and finally Valencia where there are 61 town halls facing difficulties.
In his statement, Beteta said that, “In 2012 another 3,457 municipalities finished the year with a surplus”, so as to emphasise the fact that those councils who are struggling are in the minority, infact, they are just 6%of the total number of municipalities.
He then went on to explain that the ministry has designed several mechanisms for municipalities “drowned by debt”, so they can keep paying essential services and wages, with flexible payment plans for clearing pending bills with the tax and social security systems.
However, in order to get the bailout, there are a number of conditions all surrounding austerity measures, such as each municipality following a plan which includes reducing their operating costs, raising taxes, prohibiting extensions on budgets or creating new organisms.
Last year, Spanish municipalities were able to reduce their spending on staff costs and wages by 1.2%, another 5.3% on consumption and 19% on investment. The 8,117 achieved a surplus of 2,338 million; double that of 2011, with the overall reduction in expenditures reaching 5.6%.
Filed under: http://www.theleader.info/article/39619/
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