Modern Spains legacy: airports, deficits and brutal cuts

15th November 2011, Comments 0 comments

The economic downturn in Spain in recent years has followed a decade-long boom. It has also highlighted the bizarre way in which much of the good-times money was spent.

Last week, Spanish newspapers reported that a recently busted gang of drug smugglers had planned to buy Ciudad Real airport in order to ship cocaine into the country. It was hardly the kind of news that the Castilla-La Mancha authorities would normally have enjoyed hearing, but right now, almost any potential buyer of this huge building with a four-kilometre airstrip will be welcomed with open arms.

The Aeropuerto Central Ciudad Real, as it is known, is now as representative of Spain particularly 21st century Spain as the windmills and plains that surround it. Built in 2008, it was, for a time, presented by the local government as a bold way of putting the land of Don Quijote on the map, by taking in the overflow of passengers from Madrids Barajas airport, 235 kilometres to the north. It would also be a symbol of modern Spains affluence and dedication to infrastructure.

But three years and reportedly 1.1 billion in private investment later, it looks more like an almighty folly. The Socialist regional government spent millions subsidising a handful of international flights per week, promoted the project with advertising campaigns and approved a 140-million guarantee to keep it afloat. But at the end of October, the last commercial flight, manned by Vueling, took off from the airport. The airports future is now unsure. It remains open, with staff still employed in the building. Buyers are being sought. But the projected overflow of travellers from Madrid, it transpired, has been taken care of by the capitals own Terminal 4.

Locals complain about other expensive projects that devour public money but whose benefits are dubious, such as the 6-million centre for sporting excellence in Puertollano, just up the road from Ciudad Real. According to Puertollano residents, for a long time the building stood empty, with little excellence being produced by its huge, expensive walls.

But airports seem to have a peculiar attraction for Spains local politicians, who have eagerly built them in recent years in towns and small cities such as Huesca, Castelln, Burgos, Salamanca and Lleida, with another planned for Teruel. Some have already proved their lack of profitability due to a lack of demand, such as Huescas, which like that of Ciudad Real has become something akin to a ghost airport.

Most of these projects, like some high-speed AVE routes to out-of-the-way destinations, coincided with Spains boom years. The decade-long bonanza that started at the end of the 1990s and was driven by construction ensured deep pockets not just for the central government, but also the regional governments.

Its hard to argue with the benefits of this spending. Spain has a superb transport system, particularly its rail links. Puertollanos centre of excellence might be easy to sniff at, but heavy investment in infrastructure is cited as one of the main reasons why Spains footballers and other athletes currently dominate much of world sport.

Basic services suffer

And yet, clearly something was amiss. Since taking power in the Castilla-La Mancha region in the spring, the new Popular Party administration has pledged to slash spending on health by 400 million. Teachers in the region are angry at having to take pay cuts and work longer hours. Castilla-La Manchas government says it is now handling a deficit worth around 9 percent of its GDP compared to the 1.3-percent target the central government had set the countrys regions.

Regions in Spain have the capacity to spend a lot, because health and education, among other things, belong to them, Jos Antonio Herce, of Analistas Financieros Internacionales consultancy, told Iberosphere.

The regions have to spend a lot of money because they oversee these very important social programs, but they dont have the capacity or they dont want to use it where they have it to charge taxes on their populations. Its much easier to spend than to tax.

This gap between local authorities freedom to spend and their lack of responsibility when it comes to raising funds seems to be at the heart of the problem. And as we contemplate what many observers fear may be a lost decade or so for the Spanish economy, one chilling legacy of the countrys recent boom and bust comes sharply into focus: towns, big and small, with state-of-the art sports halls, cultural centres, train stations and even airports; and brutal cuts to the most basic services.

© Iberosphere: Spain News and Portugal News - Information and Analysis

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