If borrowing your way out of trouble is the objective, then the Municipality of Vila Real de Santo António should be celebrating as news of the approval for funds under the Programme to Support the Local Economy in the amount of €25.6 million was released today.
Alongside this measure is a formalised loan agreements with a syndicate of seven banks for another €33.3 million. The two loans are part of a ‘financial adjustment plan’ for the indebted municipality based on the formula ‘borrow more: pay less - for now at least.’
The new monthly interest charges should be achievable by this change of short-term debt into long-term loans, but the future debt burden accumulating, for the good old ratepayers to pay back, is a significant blow to the hopes of many locals for improvements in their physical and social environment.
The mayor said today that "we have finally fulfilled one of the main objectives of this executive which was to regulate and normalise the economic and financial situation of the municipality, consolidated its liabilities and give more stability to the management."
By using the money from the Programme to Support the Local Economy, the municipality will be able to pay off debts with invoice dates prior to December 31st, 2012. Good news for local traders who would be well advised to seek alternative buyers for their goods and services.
This rearrangement of loans, and the successful receipt of the government money are part of the Plan for Financial Containment of the Municipality of Vila Real de Santo António which has been in force for more than two years, "With this funding we will honor a major part of our long-standing commitments and can establish financial stability for our county," said mayor Luis Gomes.
No such deft financial housekeeping has been possible at Portimão council which has yet to have its government loan approved and is now too far in debt successfully to qualify. Portimão is alone, all other applicant councils in the Algarve have had their loans approved. maybe this is because Portimão’s debt burden is the highest at an astounding €133 million.
The Court of Auditors overseeing the loan application is not impressed with Portimão and continues to ask difficult questions, which mayor Isilda Gomes answers to the best of her ability until the real reasons for Portimão’s failure have been rooted out and exposed by one of more of the three current enquiries, one from the Finanças, one internal and one criminal enquiry concerning the former directors of PortimãoUrbis and the deputy mayor.
