According to the Financial Yearbook of Portuguese Municipalities, presented today, 20 municipalities in Portugal exceeded the debt limit allowed by law in 2021, 2 of which are in the Algarve.
At the end of last year, these 20 municipalities had a total debt that was 1.5 times higher than the average net current revenue collected in the three previous years. Twelve of them are already paying loans to support programs for indebted councils.
According to the Financial Yearbook document, the list of councils that exceeded the debt limits by most are Fornos de Algodres, Vila Franca do Campo, Vila Real de Santo António, Cartaxo, Nordeste, Nazaré and Fundão.
The remaining municipalities were Portimão, Vila Nova de Poiares, Alfândega da Fé, Freixo de Espada à Cinta, Alandroal, Lagoa (Azores), Reguengos de Monsaraz, Belmonte, Paços de Ferreira, Seia, Évora, Peso da Régua and Tabuaço.
According to the local finance law, these municipalities may have 10% cuts in state transfers and must apply for a financial sanitation plan, by contracting a loan.
However, with the exception of eight of them (Freixo de Espada à Cinta, Lagoa - Açores, Reguengos de Monsaraz, Belmonte, Seia, Évora, Peso da Régua and Tabuaço), the remaining 12 are already paying off loans contracted for indebtedness to the Municipal Support (FAM), a program to help municipalities in financial sanitation.
Vila Real de Santo António is also still paying a loan taken out from another program to help indebted municipalities, the Local Economy Support Program (PAEL).
According to the Yearbook that analyzes the accounts of the municipalities, three of these municipalities again contracted new reinforcements from the FAM in 2021: Vila Franca do Campo received €1.3 million, Nazaré €1.85 million and Vila Real de Santo António €257,700.
At the end of 2021, 13 municipalities were paying aid received through the FAM, a mechanism for recovery and financial assistance for municipalities, through the implementation of budgetary rebalancing and debt restructuring measures.
All these municipalities repaid a total of €9.7 million in that year, but, in global terms, they still owe the FAM more than €438.1 million.
As for the 103 municipalities that resorted to PAEL, a program that lent money to indebted councils between 2012 and 2015, at the end of last year 38 had not yet paid all their debts.
As part of the Extraordinary State Debt Regularization Program (PREDE), which 92 municipalities have used, only the municipality of Tarouca maintains bank debt (56 thousand euros) under this financial support line.
The Yearbook also highlights that 83 of the 159 municipalities covered by the various programs to support debt chambers showed a decline in short-term debt between 2011 and 2021.
The Financial Yearbook of Portuguese Municipalities for 2021 is authored by a group of researchers, coordinated by Professor Maria José Fernandes, from the Center for Research in Accounting and Taxation (CICF) – Instituto Politécnico do Cávado e do Ave (IPCA) and the Center for Research in Political Science (CICP) – University of Minho.
The document has been produced since 2004 (in relation to the 2003 accounts) with the support of the Order of Certified Accountants (OCC) and after presentation it can be consulted at www.occ.pt.
Source Lusa
