As news broke last week that the country’s most indebted council has been left high and dry – waiting desperately for funding that has now been blocked – we hear that elsewhere in the country no less than 30 borough councils are on the brink of bankruptcy.
In true Latin terminology, the country’s leading tabloid Correio da Manhã headlined the crisis as: “Town councils on the edge of a nervous breakdown”.
CM wrote on Sunday that the cash-strapped government has already lent €603.8 million to 100 borough councils under the PAEL programme (programme to support the local economy) but that even so, 30 still need more funding if they aren’t to go belly-up and sail ignominiously down the swanny.
This extra funding, known as FAM (municipal support fund), is now seen as the only lifeline on a fraught-filled horizon.
“I am giving up,” the Socialist mayor of Ourique Pedro do Carmo told CM. What he meant was that he was giving up trying to get money from PAEL, and would instead go straight for FAM.
Cartaxo’s mayor Pedro Ribeiro agreed he is thinking the same.
The problem, explains CM, is that so many councils have such huge debts that PAEL funding alone doesn’t make much difference.
In the case of Portimão, in the Algarve, the Tribunal de Contas (Court of Auditors) has vetoed its bid for €94 million worth of PAEL funding – some of which would go to clearing debts that have been in existence for years.
The decision has left Portimão mayoress Isilda Gomes ‘hanging in limbo’.
She has already admitted her council is in a “very serious position”. Now, writes CM, the next week is critical. If Portimão cannot get government help, there could be cuts in service supplies and council workers will go unpaid.
Secretary of State for Local Administration Leitão Amaro told CM the government is trying to find a solution.
Portimão is the country’s worst offender when it comes to debt legacy. It is in fact €70 million further in the red than any other town council, and as such is prohibited from seeking European funds.
Meantime, the nitty gritty of FAM has still to be negotiated.
In other words, no one can tell when FAM money will be available, or on what terms.
