Spanish town Jerez, on the verge of a financial collapse. Expect more to follow…
Regular readers of The Trader know our negative view on the Spanish Economy. The desperate situation of many Spanish towns and municipalities, has not been in focus, as investors have been focusing on the chaotic Greek financial situation. Maybe it is time to start focusing on the possibly much bigger problems Spain faces. Jerez, a beautiful town in southern Spain, famous for it’s Jerez wine and proximity to the Atlantic Ocean is practically bust. Expect the Zapatero blame game to intensify, while the “cheap” property market goes into free falling mood soon. From El Pais;
The mailbox is a cold economic indicator. You know things are not going well when the notices and returned bills start piling up. You also know things are bad when your daughter starts having problems at school because she thinks her parents are breaking up. Francisco Marcos has not been sleeping at home lately, but it’s not because he’s mad at his wife, as his daughter believes. He is one of 14 employees at the municipal cemetery in Jerez de la Frontera who have spent several nights camping out at the doors of the graveyard. They are demanding that the local government pay them the two months’ wages they are owed.
Undertakers have not received their paychecks since December, but then again neither have local police officers, clerical workers or janitors employed by the city. As a matter of fact, nobody in the 2,400-strong public workforce has been paid.
If you are the local economy chief, you know your town has reached rock bottom when you start the year without a single euro in the money box.
“Liquidity for the year 2012 is zero. There is no money for paychecks or for basic services,” admits Enrique Espinosa of the Popular Party (PP), which runs Andalusia’s fifth-largest city (population 212,629) and a place world-famous for sherry wine, flamenco, its motor racing circuit and pure-blooded horses.
Full tragic reading.