The government has blocked an investment of €3.5 million planned by Faro council to improve roads, green spaces, schools and public buildings.
Some of the money had been carried over from last year and the council had received a spending go-ahead last summer from the Secretary of State for Local Government.
An application to spend the money in 2016 and 2017 now has been denied due to pressures in the 2017 State Budget, currently winding its way through parliament.
Faro town hall said today that the government has questioned the merits of its planned investment, much of which was to be used to catch up after years of budgetary rigour that has affected Faro and its outlying parishes.
The programme to renovate roads at the eastern and western entrances of the city, announced in early October - see ‘Faro's 'green space' improvements mask threat of major development' has been frozen despite benefits to the look and feel of the city whcih, even though it is the regional capital, performs poorly in tourism income.
"Thus, for the Government, not one of these investments is a priority or seen as essential to the county. The total amount of €3,456,000 million sits in the council’s account and can not be used to meet the needs of our county," according to a press release this evening sent out from the town hall.
The plan in question was proposed by the Social Democrat mayor, Rogério Bacalhau and was unanimously approved at a meeting of the full Municipal Assembly.
Faro has been punished for its prudence as its accounts are now in good order, and for having a Social Democrat mayor during a Socialist government.
As for the national 2017 State Budget, Finance Minister Mario Centeno said today that his forecasts for tax revenues in 2017 are "extremely conservative."
In a letter sent today to Brussels, Centeno said he has gone in low on the revenue projections and expects a tax amnesty and taxation of assets will yield more than planned.
The European Commission had requested more budgetary information from the minister who responded that he expects tax revenues to grow 2.9% in 2017.
Social Security income projections, for which the Commission had also asked for further explanation, are based on "the strong developments in the labour market" with a fall in unemployment benefit and a rise in in-work contributions.
The government response to Brussels reaffirmed its commitment "to achieve the recommended targets" and states that during 2017, it "will continue to ensure a sustainable fiscal consolidation in a socially inclusive and growth friendly manner."
