Twenty-eight Portuguese municipal câmaras are on the brink of financial collapse according to the business newspaper Jornal de Notícias (JN).
The information is based on data released by the Directorate-General of Local Authorities (Direcção-Geral das Autarquias Locais).
According to JN, the ‘Troika’ is “permanently monitoring” these municipal councils, the ones in the worst financial state being Aveiro, Gondomar, Valongo and Trofa – all in the north of the country.
Fornos de Algodres in Guarda is viewed as the most serious case with an equivalent debt of 547% of receipts received this year.
Lisbon, Gaia and Porto were outside the red list because although they have huge debts, they generate sufficient wealth to service them.
Because of the “critical situation” of the 28 authorities, the Government is set to announce a new model of local organisation and power, as part of its overall administrative reforms, which was presented to parliament yesterday (Thursday).
Under the outline terms of the new model, many smaller local authorities will be dissolved, joined together with other small ones to make one large one, or merged with larger existing ones.
