The village of Pioz in Spain, with a population of 3600 people, was declared the most impoverished in the whole Spain and became a symbol of the excessive spending and poor management of finance in the country.
The secretary of State of Public Administrations, Antonio Beteta, announced yesterday that Pioz will need 7.058 years to pay its debt to lenders. The mayoress of Pioz admitted some hours later that she had “all the bailout papers”. Antonio Beteta also insisted that this situation demonstrates a serious mistake in the system and that the village of Pioz is a paradigm of bad management.
The village was headed over years in debts as a result of the ambitious investment program of the local socialists’ authorities, which consumed more money than the revenues of the village. As a result of this, the locality’s debt approximates 16 million euro. Due to the high unemployment rate at about 25%, however, Pioz can pay back only 2000 Euros per year. In order to repay its debt, the village will need 7.058 years at an interest rate of 5 % or 6 %.
The village has raised a complex of 100 new houses, but today only two of them are habitable; the others have boards with ads “for sale.” Due to the accumulated debts the street lamps are not switched on at night, the maintenance of roads is ceased, and garbage is not collected. The nearby water purification plant is not working due to lack of funds for its proper operation; there is no money for the electrical pumps and for hiring staff. The inhabitants of Pioz remain the only consolation that the village is situated close to a 15th century castle where the aristocratic Mendoza family have lived, and this attraction could draw visitors’ interest.
Rodríguez confirmed that Pioz is at present in a very complicated situation because it accumulated debt of 16 million Euros. The secretary of State of Public Administrations also indicated that the municipality does not have sufficient revenues, except that these coming from real estate tax and the contributions received from the State.
According to the calculations carried out by the Spanish media CincoDías, Pioz receives monthly from the State 35.784 euros to pay its operational expenses and the realized investments. Bearing in mind the amount of debt and the announced yearly instalments, the municipality will need exactly 7.058 years to repay the whole debt that was contracted with the creditors without stopping to pay the rest of the other obligations and expenses (like payrolls and basic provisions).