Total debt 1.5 times higher than average revenue collected in previous three years
20 Portuguese municipalities have got themselves into hideous levels of debt.
According to the law for municipal finances, this means they could face 10% cuts in whatever sums the State is due to send them – and they must apply for a financial reorganisation plan.
Says SIC television news today – citing the Anuário Financeiro dos Municípios Portugueses (Financial Yearbook of Portuguese Municipalities) – 12 are “already paying loans to support programmes for indebted councils”.
So which municipalities are they?
The list is “headed” says SIC by Fornos de Algodres, Vila Franca do Campo, Vila Real de Santo António, Cartaxo, Nordeste, Nazaré and Fundão.
In other words, only one municipality in the Algarve… But then come the others: Portimão, Vila Nova de Poiares, Alfândega da Fé, Freixo de Espada à Cinta, Alandroal, Lagoa (Azores), Reguengos de Monsaraz, Belmonte, Paços de Ferreira, Seia, Évora, Peso da Régua and Tabuaço.
Thus, two municipalities in the Algarve are among those most in debt – both held by the Socialists; indeed, Portimão’s three term Socialist mayoress Isilda Gomes has only recently clinched a top job in Europe (so her administration’s indebtedness does not seem to have worked against her).
Says SIC, the municipalities are both among the group that is already paying loans contracted to try and make up for indebtedness (FAM Municipal Support Fund, in the case of Portimão, PAEL Local Economy Support Programme as well as FAM in the case of VRSA).
The 20 borough councils’ debt levels are described as 1.5 times more than the average net current revenue collected in the previous three years.
The Financial Yearbook of Portuguese Municipalities for 2021 was prepared by a group of researchers, coordinated by Professor Maria José Fernandes, from the Centre for Research in Accounting and Taxation (CICF) – Polytechnic Institute of Cávado and Ave (IPCA) and the Centre for Research in Political Science (CICP) – University of Minho.
The document has been produced since 2004 (for the 2003 accounts) with the support of the Certified Accountants Association (OCC) and after the presentation it may be consulted at www.occ.pt.