Vila Real de Santo António is one of the four Portuguese municipalities that were in a situation of “financial rupture”, that is, with a total debt ratio above 300%, and belongs, like Portimão, to the group of 14 municipalities in the country that were above the legal debt limit at the end of 2022, indicated today the Public Finance Council (CFP).
At a national level, the scenario for municipal accounts is encouraging, since 269 of the 300 municipalities that reported information – almost 90% – were in financial balance at the end of last year.
In the “Budget Evolution of Local Administration in 2022” report, released today, the institution chaired by Nazaré Costa Cabral indicates that, at the end of 2022, the vast majority of municipalities for which information is available were in a situation of financial balance from the perspective of the Financial Regime of Local Authorities and Intermunicipal Entities (RFALEI), three more than in 2021.
In addition to VRSA, the Chambers of Cartaxo, Fornos de Algodres and Vila Franca do Campo were in a situation of “financial collapse”.
Of the 14 municipalities with debt above the limit, 11 were in a financial recovery process within the scope of the Municipal Support Fund: Alandroal, Alfândega da Fé, Cartaxo, Fornos de Algodres, Fundão, Nazaré, Nordeste, Portimão, Vila Franca do Campo , Vila Nova de Poiares and Vila Real de Santo António.
As for the remaining three municipalities, RFALEI determines mandatory adherence to the financial sanitation framework.
The number of municipalities with debt below the legal debt limit increased from 284 at the beginning of 2022 to 286 at the end of the year, with the value of their debt decreasing by 5% (-152 million euros).
Even so, the CFP points to “unfavorable developments in the sub-echelon of municipalities closest to the limit”, with an 8% increase in debt in the echelon of municipalities with a debt ratio between 1 and 1,5 times the revenues relevant for the calculation. of the total debt limit.
According to details, increases in the total debt in the municipalities of Mafra (17 million euros), Paredes (2022 million), Tábua (two million), Tarouca (38 thousand euros) and Gouveia (21 thousand euros), whose degradation of the respective ratios exceeded the reduction in total debt by 800 million euros in the remaining 700 municipalities.
The CFP report also indicates that the total debt of municipalities considered for the purposes of the legal limit will have decreased again in 2022, by 218 million euros, totaling around 3.600 million euros at the end of the year.
However, he notes, “this reduction would be smaller (160 million euros), if all municipal liabilities were taken into account, that is, including the debts that the legislator decided to exempt, since these increased by 59 million, especially the one excepted for the RFALEI shelter”.
Despite the overall reduction in total debt considered for the purposes of the legal limit, 89 municipalities recorded increases which, as a whole, amounted to around 177 million euros, but which were more than offset by the decrease observed in the remaining 211 (395 million of euros).
The Public Finance Council states that the 6% debt reduction in 2022 was “across almost all levels” and “will have been more intense in the most indebted municipalities (-16%)”.
Of the 16 municipalities that exceeded the total debt limit at the beginning of the year, two of them (Belmonte and Seia) will have started to respect that limit, with only Freixo de Espada à Cinta not having observed any improvement in the respective ratio, nor in the debt.
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