Bankruptcy on the horizon

Salom (top left) described the quite dramatic circumstances in which bankruptcy could not be avoided unless the Balearic government were to provide a rescue package and pay part of the 240 million euros owed by the Council of Majorca.

Meanwhile, no-one knows for sure what is going to happen, said Salom, and it is even the case that there may not be enough money for the salaries of government workers.

Salom is going to present the details of the audit next Tuesday. They apparently make clear the fact that the previous Socialist President of the Council of Majorca, Francina Armengol gave authority to spend a great deal more than the money which was being made available. There are still, said Salom, invoices outstanding from 2008.

Salom said that unlike the regional government, Central Government in Madrid makes its subsidy payments promptly. She added that the situation therefore demands that the Balearic President Jose Ramon Bauzá authorises payment of at least some of the outstanding 240 million euros.

Separately, the Council of Majorca is incurring a further debt which is likely to reach 35 million euros by the end of the financialyear. This will force Salom and her ruling Partido Popular team to even make cuts in the present budget of the Council of Majorca to adjust it to what income there is.

Financial commentators have said the figure could be as much as 40 percent of the 2011 budget which was rolled over from 2010 due to Armengol being unable to get a majority vote for her financial plans for the year.