The state has injected €36 billion into Portugal’s indigent, incompetent and often corrupt local councils under the Programme to Support the Local Economy
The plan was to help local authorities pay off years of outstanding invoices to suppliers but there are still 30 councils on the verge of financial meltdown, in fact 6 of them are technically insolvent, including Portimão.
Portimão, Fornos de Algodres, Aveiro, Nazaré and Gaia are some of the councils included in a new list of those now facing financial collapse.
The money that has been authorised under the programme was destined to pay off local suppliers but some councils still are running at a loss and hence do not qualify for state aid, a downward spiral for those councils in most need of refinancing. It is not helpful that some of the money destined to bail out councils has itself been delayed by the Court of Auditors and is not expected before June this year - 6 months late.
President of the National Association of councils, Manuel Machado, said today that "the programme was helpful, but some councils still failed to solve the problems in this way.” In other words, 'throwing money at the problem has not always worked.'
Of the 308 councils in Portugal, 110 asked for help from the support programme but councils such as Portimão and Loures are running at a loss with debts each of over €100 million meaning that interest payments are soaking up money that should be used to run the council.
Portimão also faces an extraordinary inspection by the General Inspectorate of Finanças which also is looking into the municipal company Portimao Urbis where the ex-Mayor, Deputy Mayor Luis Carito and Councillor Jorge Campos have already been arrested and accused of financial crimes.
This Finanças investigation will work in coordination with the team of auditors brought in by Mayor Isilda Gomes to unravel the complex workings of the previous administration led for 12 years by the inept Manuel da Luz who left the council in debt by nearly €170 million.
Blameless newly appointed Mayor Isilda Gomes did get to see the Prime Minister last week to plead for special treatment as years of financial incompetence and possible thievery from the previous administration has made Portimão council a study in how not to run a local council.
