Cash-strapped Câmaras unable to pay debts


[email protected]

AN INDEPENDENT study on the debt situation of Câmaras in Portugal has concluded that the majority of them cannot afford to repay their debts.

The study, the Anuário Financeiro dos Municípios Portugueses 2005, was carried out by professors from Minho University, in the north of Portugal, and presented at a national finance and accounts meeting presided over by the Secretary of State for Local Administration, Eduardo Cabrita.

Results reveal that fewer Câmaras asked for bank loans in 2005 than in the previous year. However, the overall debt had reached 6.5 billion euros, with four billion euros being owed to banks alone.

Conclusions drawn from the study say that the majority, up to 74 per cent, of Portuguese Câmaras do not have the financial means to pay their short term debts.

They also risk seeing their financial situation worsen with the new local finance law that could cut a significant amount of the money they receive from the government.

A spokesman from the local administration secretary of state’s office told The Resident: “Câmaras in the Algarve receive the most money from the government. “At this moment, next year’s budget is being prepared and, in the next few weeks, a list of the Câmaras that are going to be penalised for overspending will be made public.”


In comparison to the previous year, the Câmaras spent an average of 913 euros per person, an increase of 91 euros.

It was also revealed that, on average, Câmaras spent 28 per cent of their budgets on staff and personnel, with a total of 1.9 billion euros spent in 2005.

Of the 307 Câmaras in Portugal included in the study, tables showing the 25 most and least indebted were created.

Faro and Silves Câmaras in the Algarve were included on the list of those with the greatest negative difference between the money they receive and the amount that had to be paid in 2005, with Faro having a negative balance of 28.4 million euros and Silves 23.2 million euros.

Albufeira and São Brás de Alportel, however, were included in the list of 25 councils to have a positive balance after all necessary payments were made. In 2005, Albufeira achieved a positive balance of 6.4 million euros and São Brás achieved 489,000 euros. This is the first study of its kind and represents all but one Câmara, that of the Island of Madeira.

It is expected that another report will be released next year with the continued support of the Tribunal de Contas, the governing body that oversees public spending.

Do you have a view on this story? Email: [email protected]