Salaries of workers at Portimão council are able to be paid for two more months and then that’s it, unless the government can come up with a rescue plan for the insolvent municipality.
Overall the council owes around €150 million and recently tried to borrow €94 million under the government's Programme to Support the Local Economy scheme.
Portimão’s application for funds was rejected by the Court of Auditors. The request to banks for €39 million of refinancing was dependent on the council getting the government loan.
Mayor Isilda Gomes’s last chance of making sense of the mess she has inherited is the granting of special government aid from the Municipal Support Fund which the government has set up to help those councils in such deep trouble that they do not qualify for money under the Programme to Support the Local Economy.
"If the government does not support us, wages may possibly be under threat," admitted Isilda Gomes who still is confident that a higher power will step in, but in the meantime there is money only for the next two months payroll and holiday allowance payments.
The council’s annual budget is €38 million, half of which goes on wages.
At the end of 2007 the council owed an unenviable, but manageable, €30.5 million.
After 5 years under the incompetent stewardship of mayor Manuel da Luz the council’s debt had mysteriously risen to €166.5 million - audit and police investigations continue and questions must be asked as to how this council's financial situation was allowed to get so out of control.
