THE most deeply indebted in Spain, requires, at its present level of municipal income, more than 7,000 years to struggle clear, according to the Secretary Ministry of Public Administration.
The Mayor of Pioz (population 3,800) a village promoted as a ‘Rural Spanish Idyll’, in Guadalajara Province, said hers was probably the culprit.
The ex mayor of Pioz was fat to rubbish the claims saying the debts of the town stand at about €6 million and not €16 million, accusing the lady mayor of seeking 5 minutes of fame.
Nevertheless, be it 7,000 or 2,500 years to pay its debts, this small community could perhaps be held up as an example, a microcosm of the overspending that has led many municipalities, regions, and even Spain itself, into almost unmanageable debt.
During the ‘boom’ years Spain suffered a rash of frantic building, financed by banks only too willing to extend credit to developers who, in their turn, stampeded to cover any spare tract of land with apartment blocks, urbanisations, and houses, erected and marketed ‘on spec’.
Now, of course, many stand unsold or at best, under-occupied.
Along the coastal regions some promoters, those still solvent enough to wait for the politician’s promise of economic recovery to become reality, have taken to letting their surplus stock as holiday apartments, leaving not just Pioz but much of the over-built south, a series of out-of-season ghost towns.
If Pioz seems to be suffering more than most, perhaps it was that, at the height of the ‘boom’, standing as it did in the middle of a sunlit plain, and with views of distant snow-capped mountains, the site appeared a developer’s dream.
The Ayuntamiento was enthusiastic, the banks even more so, and probably even the townsfolk raised no objections, seeing business opportunities and a future for their children.
But then the bubble burst, leaving the town saddled with hundreds of desolate, unsold houses, the wiring and bathroom fittings of which have been ripped out by gangs of thieves from outside.
A municipal swimming pool lies stagnant because there is no money for maintenance, whilst other
projects that seemed good ideas at the height of the boom, are incomplete and crumbling.
“It’s a never-ending and heart-breaking struggle just to generate enough municipal income for essential services, even reduced as they are;” explains the lady Alcalde despairingly, “and worst of all is that, strive as we might, we can see no light at the end of this particular tunnel.”
What is so sad however, is that the banks, developers, and municipalities were given fair warning 20 years ago when, owing to a mini-recession in northern Europe, (brought about by the failed EMU experiment) the original building boom screeched to a sudden halt.
Construction work ceased, with half-built apartments and houses standing like ruins.
One of the largest property companies on the Costa Blanca managed to make just one sale in twelve months, but then, when the ‘good times’ rolled again, the banks handed out loans, the developers grabbed the money with both hands, and the construction industry hummed – until the second over-inflated bubble burst.
Now, with the property market – indeed the whole economy – in the doldrums, perhaps for years to come, the developers have defaulted, leaving the banks with countless properties they have no hope of selling, and a debt balance of €185 billion.
As one ex-construction worker in Pioz said: “Life was good back then. I had a house and two cars. Now I’m unemployed and living back with my parents, with almost no hope of ever finding work.”