After Castilla today is the turn of Navarra being on the edge of default:
Navarra has no money to pay for commitments made this year.
Vice President of the Government of Navarra, Roberto Jimenez, said
that “the situation is dramatic provincial coffers are empty and there is no money to pay
for commitments made this year.”
“There is money to pay public workers but no money to continue to provide quality public services”
has a deficit of 600 million euros,”
It is not an isolated problem since local councils and regions all over Spain are facing a breakdown after massive spending cuts are turning a severe recession even more harmful.
The Telegraph reports Electricity cut off to Spanish town over unpaid bills
near Malaga in southern Spain, is, like many towns across the
crisis-hit nation, on the verge of bankruptcy with an estimated debt of
nearly 30 million euros (£26m) owed by the town council.
than a week there has been no lighting in public areas after power
company Endesa cut services because of an outstanding bill of 280,000
Meanwhile some 500 council employees in the town have not yet been paid their August wages, it was reported.
town of 22,000 residents has been ordered to make an urgent payment of
400,000 euros (£346,000) to the Treasury in monthly instalments to cover
its debts but the mayor has said the town will be forced to file for
It is a problem repeated in municipalities across
Spain. In some towns, police officers have been ordered to walk to crime
scenes in a bid to save costs on patrol cars.
On Tuesday rating
agency Moody’s warned that Spain’s regions could fail to meet their
deficit-cutting targets, a move considered necessary for the nation to
meet the EU-agreed public deficit ceiling of 3 per cent of GDP by 2013.