The Court of Auditors has refused Portimão council’s rescue package application for €94 million, leaving the municipality in acute danger of insolvency.
The council plans to 'work around the problem' with the government.
The Court of Auditors felt unable to approve the rescue plan and loan application by Portimão council using the Directorate General of Treasury and Finance's PAEL (Programa de Apoio à Economia Local) system set up to rescue indigent councils.
The decision officially was communicated to Portimão council on Thursday and the Mayor of Portimão, Isilda Gomes, was on the phone immediately to the Secretary of State for Local Government, António Leitão Amaro, “to find an urgent solution for the municipality."
Isilda Gomes pointed out that in several meetings with various government officials including the Prime Minister, the Finance Minister, and the Deputy Minister for Regional Development, they always had "demonstrated an openness and willingness to study and come up with an extraordinary solution for Portimão," if the PAEL application was rejected by the Court of Auditors.
"From the number of requests for clarification demanded by the Court of Auditors concerning this process, it became evident early on that an alternative plan was needed that would ensure that the interests of creditors of the municipality would not be prejudiced," said the Mayor today.
The current Portimão council said the plan was inherited from the previous executive, and it knew in advance "that it would not solve once and for all the serious financial problems that the municipality faces," rather it had considered that the plan was a "more immediate solution" and that it was their duty to "do everything possible to ensure the council’s viability."
Portimão council also recognises "the sense of responsibility with which the government has faced a serious financial situation."
Given these facts and the commitment shown by the government so far, and despite the precise content of the judgment of the Court of Auditors not yet being known, the council will continue to work with the government and the National Association of Portuguese Municipalities, "so that an alternative solution is quickly implemented, the next week being a decisive one."
The council praised the commitment of all its creditors, including the banks, for always having been "part of a solution” rather than causing more problems.
"The setback of not getting the loan application past the Court of Auditors does not undermine the firm purpose of this town hall to honour its commitments to its creditors," according to Gomes who also wanted to reassure Portimão’s residents, employees and suppliers and reaffirm that the executive will continue with transparency to working in the defense of the legitimate interests of its residents.
Comments
How do these councils get into debt in the first place? For over 2 decades they have had up to 100% of their expenditure on roads, infrastructure and public buildings etc paid for by Brussels !!!
Each council gets at least 15 million euros to run itself and its Freguesias- the bigger councils twice this or more.
Is it anything to do with the many hundreds in the workforce being selected on a friends & family and 'political affiliation' basis - the same selection criteria as the enterprise projects the municipals support ???
And without these connections - HINDER & DELAY!