Spain’s town hall meltdown


Alasdair Fotheringham 
The Independent

October 31, 2011

If Carmen Martinez Gomez, a nurse, wants to see the effects of the dramatic spending cuts Spain is currently enduring, all she has to do is glance down from her seventh-floor balcony at the building work below on the Metro, Granada’s first underground line.

It is less than 10 miles long, but the Metro has already been five years in the making. And with its workers unpaid since January, its inauguration has just been put back again, reports said last week, until 2013. “It feels as if it’s never going to be finished,” Ms Martinez says. “The whole of Camino de Ronda” – three miles long and one of Granada’s main arterial streets – “looks as if a bomb hit it. Shops are going out of business because there’s virtually no through traffic, and for the elderly and disabled it’s very difficult to cross the road. The project has split the city in two.”

The reason for the interminable delays in Granada’s Metro is simple: no money – and it’s a grimly familiar story. As early as this summer, Pedro Arahuete, mayor of Segovia and president of the country’s federation of municipalities, said that 40 per cent of Spain’s town halls or ayuntamientos were in severe economic difficulties, or, as he graphically put it, being “financially strangled”. And all across Spain, ayuntamientos and regional councils such as Andalusia’s Junta, which is financing the Granada Metro’s construction, are in the process of making massive cuts, with about €5bn due to be pruned from budgets across Spain in 2012′s last quarter alone.

But with a total town hall debt government figures show to be nearly eight times that amount – €37bn – the cuts are far from being the last notch set to be tightened on Spain’s collective belt. They are largely designed to bring a public deficit into line with EU ceilings of 3 per cent of GDP in 2013 at a painfully fast pace. The most dramatic steps to try to balance the books are being taken in the village of Cacabelos in Castile. With his village facing debts of €1m, the mayor’s brainwave was to bet the annual budget on the national lottery. Their number did not come up.

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