PSOE And The Mallorcan Debt Mountain

Some serious questions need to be answered. The government of José Bauzá may be exaggerating the size of the Balearics debt and laying all the blame at the door of the previous administration, but there were clearly some pretty odd things going on during that administration.

Bauzá hasn't discounted the possibility of setting in motion legal processes if there were irregularities over and above mere inefficiencies at both regional government and Council of Mallorca levels between the springs of 2007 and this year. Recourse to the law does smack of possible vengeance by the Partido Popular. Voices in the party levelled accusations of a politicisation of the legal system in respect of the pursuit of officials dating to its 2003-2007 period of office. There is just a hint of payback.

The Balearics debt has accumulated over years, not just the four years of the PSOE administration. There has been a spend-spend mentality at all levels of government in the islands, including that of the Partido Popular from 2003 to 2007; a fair amount of which spend is still under scrutiny by anti-corruption prosecutors.

However, it was the case that the last administration did opt for a spend budget in 2008 at precisely the time when it could least be met. It may have been unfortunate that crisis took hold, but there is no getting away from the fact that PSOE helped to push the islands into ever deeper debt.

To an extent, doubly unfortunate therefore, the mounting debt was the consequence of a fall in tax revenues brought about by crisis, but fiscal explanations lack the appeal of being "sexy" when compared with the missing millions designed to take a headline-writer's fancy and flabbergast a public.

The International Monetary Fund, as well as barons in Brussels, who have been pressing Spain on the need to reduce the burden of regional debt, must have gasts as flabbered as the rest of us in trying to understand how the rotten borough that was (still is, to be honest) the Council of Mallorca could have spent some 100 million euros of state money, intended for road-building, on grants and paying salaries. Actually, it is quite easy to understand, as sound governance of public finance has long been only a chapter in a textbook and not something put into practice in Mallorca.

There was also the farce of the Manacor to Artà train, now effectively abandoned, into which vast sums were pumped despite heavily conflicting evidence as to how much traffic the railway line would generate. A delicious but sad irony of the work that has seen land ripped up and levelled is that it was the brief of a transport minister from the environmentally righteous PSM (Mallorcan socialists) who later also became environment minister in the PSOE-led regional government. The work on the line paralysed, the damage to the landscape has been environmental vandalism, predicated on a project with a questionable business rationale. How much will it cost to put the land right again, if it ever is?

Going back to the Council of Mallorca, we now have another intriguing example of public financial management. It relates to a consortium known as Eurolocal-Mallorca. What its precise purpose is, is not entirely clear. Ostensibly it is intended to support active European participation in local Mallorcan authorities, which means ... . Well, which means what?

The consortium was established in 2009 and was an initiative of the former president of the Council, Francina Armengol. In its two years of existence there is little evidence as to what it has achieved (perhaps unsurprising given the vagueness of its purpose). It has operated with a budget of 126,000 euros and its director has been trousering 70 grand a year.

Mainly, or so it would seem, the consortium people have spent their time heading off to Brussels. Why? Who knows. But mention Brussels, and who can forget the occasion, in February 2009, when some 40 mayors plus government politicians and others (150 of them in all) headed off to the Belgian capital for a spot of lobbying against the European pyrotechnics directive that Europe had no intention of using to try and ban demons' fire-runs. Ah, those were the days; when public money could be easily spent on a jolly with airline tickets and accommodation chucked in.

The new president of the Council, Maria Salom, is going to close the consortium down. Having also decided to shut another spectacular waste of money, the Council's tourism foundation, one wonders what other bodies are lurking that need disinterring and what other questions will emerge that need answering.


Any comments to andrew@thealcudiaguide.com please.