Canarian Ayuntamientos in dire financial straits

Update 27 February 2012: The president of the Canarian Municipalities Federation (Federación Canaria de Municipios: Fecam), Ramón Plasencia, has warned in a press conference that ayuntamientos will have problems in supplying even the most basic of services if the state toughens its economic conditions.

Given the new Spanish PM’s recent comments about the country still not having reached the bottom of its economic slide, and that the situation will get much worse yet, it seems almost inevitable that the situation in the Canaries will worsen too.

Sr Plasencia said that Fecam is drawing up a resumen of the law concerning the payment of suppliers to see how this affects local municipalities in order to try to clarify payment conditions. He said that all ayuntamientos want to pay their suppliers, but are now facing a situation where they simply cannot do so.

Clearly, a formula needs to be found, but with Fecam saying this is only even conceivable if the economic situation doesn’t worsen, it doesn’t look hopeful.

Update 14 December: … and now Buenavista Ayuntamiento has said it cannot pay staff’s salaries for November (nor December) unless it receives around €100,000 funding arrears from the Canarian Government this week

Update 18 November: El Tanque Ayuntamiento confirmed yesterday that a Contract Extinction Plan will be put in place before the end of the year in order to get rid of between 20 and 23 municipal staff. The borough has 80 full-time personnel and still has not paid October’s salaries, and says it might not be able to pay staff next year even if it gets 100% of its proposed budget.

With various legal cases coming up in addition to its current financial woes, the Ayuntamiento could be broke and in severe debt for years, said Mayor Román Martín. Indeed, if all the outstanding cases go against the council the resulting costs would eat up the borough’s entire budget for nearly a decade.

Original post 13 August: Half of the 88 municipios in the Canaries now say that due to their own economic difficulties, they are not going to be able to continue to provide even basic services like financial help for junior schools and social services, including assistance to people in financial hardship.

The Federación Canaria de Municipios (Fecam) has warned that the outlook is “quite dark” for the forthcoming months. Fecam’s acting vice president, Antonio Calcines, said that the problem is rooted in the reduction of council income as people struggle to pay their municipal bills while costs continue to rise. Sr Calcines said, moreover, that unless there is a moratorium on repayments to central government of overfunding, then we are going to see bankrupt Ayuntamientos.  PV

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