By Humphrey Carter

INFLATION hit a 13-year high in Spain yesterday prompting the Balearic government and the Council of Majorca to announce that plans to cushion the impact of the looming recession and prop up the local economy are being drawn up.

Last month, the cost of living here in the Balearics went up a further 0.6 percent, in line with the national rise while regional inflation since the start of the year has hit 2.7 percent and the cost of living is currently 4.7 percent more expensive than it was this time last year.

Yesterday, the Balearic spokesperson Margarita Najera pledged 70 million euros to the local construction companies to which the government owes the best part of 100 million euros.

In total, building firms are owed over 223 million euros with the Islands Councils and municipal authorities liable to cover the outstanding debts or face legal action, as the Bulletin reported yesterday.

Najera said that the government is taking out a loan in order to clear the bulk of the outstanding bills with companies contracted by the former Partido Popular government to work on projects like the metro and Palma's controversial Arena.

Najera also announced that the President of the Balearics, Francesc Antich will be meeting the leader of the conservative PP opposition, Rosa Estaras, before the end of this month to discuss the present economic climate and ways of easing its affect on the region.

She said that the government will have a plan of action involving public, private and social institutions ready by the end of July.
The President of the Council of Majorca, Francina Armengol, yesterday accepted a motion tabled by the PP that the body should reduce certain rates in order to ease the financial burden on the local population.

Armengol told a Council of Majorca meeting that the authority is in talks with Palma City Council and the Government over reducing the rubbish collection and waste treatment rates.

She said that a review of Council of Majorca spending has also been launched in a bid to cut departmental operating costs and some public investment projects are going to be brought forward.

However, Armengol was forced to admit that there is very little the Council of Majorca can do to combat the global credit crunch and she blamed the United States's “Neoconservative” policies for the high prices of fuel and food which the world, including the Balearics, is struggling to pay for.

Armengol added that, closer to home, the boom and bust attitude of the former PP government allowed the building and construction industry to run out of control and in to the problems it is facing now.


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