Council requests recognition of status as creditor of the Balearics in order to collect on debts

This 21 March, the Formentera Island Council formally solicited recognition by the Autonomous Community of the Balearic Islands as one of the community's creditors. The Council requested delivery of the certificate recognising the existence of unresolved payment obligations, information that was included in the application documentation sent to the Balearic Government.

The request comes as an anticipated consequence of Section 5 of the Resolució del Vicepresident Econòmic, de Promoción Empresarial y de Ocupación (Resolution of the Economic Vice President on Occupation and Business Promotion) of 4 March 2013, and with respect to the obligations referenced in Article 29 of the Royal Decree Law 4/2013 of 22 February, which establishes a new phase in the special financing mechanism for payment to creditors of the autonomous communities.

The Formentera Council requests of the Balearic Government the recognition and payment of a total of 8,726,396.08€ for conventions and collaborative projects. The greatest portion of the debt is connected to the “Convention on palliative investments for Formentera's infrastructure deficit”, in the amount of 6,500,000€. Debts on statuary investments, and specifically on the construction project for Plaça de Europa in Es Pujols, total 1,805,124.12€. The outstanding assistance due for the “Ley de barrios” (Neighbourhood law), implemented in the beautification and fitting for services in La Mola urban area, is also being solicited. This sum adds an additional 421,271.96€.

These figures correspond to the debt that the Balearic Islands Autonomous Community accumulated with Formentera up through 31 December 2011, but all of the obligations generated during 2012 must also be added. This brings the autonomous community's debt with the Formentera Council dangerously close to our institution's total budget: 22,265,000.00€.

The counsellor of the Tax Office and Territory of the Formentera Council, Bartomeu Escandell, related his concerns regarding “the continued increase in 2012 of the autonomous community's debt and his hope that the Balearic government takes steps towards settling the issue. The Govern Balear must officially recognise the island councils and local administrations as service providers of the governing body in order for the island institutions to avail themselves of financing by the Fondo de liquidez autonómico (Fund for liquidity of the autonomous communities, or FLA) and liquidate the debts that the autonomous government holds”.

Furthermore, he added that “the Govern has to start making decisions and assuming responsibility for its obligations or, contrarily, it will drag the island councils down toward technical bankruptcy”.

The Formentera Island Council has had to take drastic financial measures – many affecting the local population – in order to ensure that the Council and its services remain viable and in order to manage the volume of debt that the Balearic Autonomous Community maintains with Formentera.