Town halls to get their hands on 8 billion Euros to fight crisis

Spain’s town halls are to be given a key role in fighting Spain’s economic crisis. Prime Minister José Luis Rodríguez Zapatero’s wants them to help him spend 8 billion of the 33 billion Euros his socialist government plans to pump into the economy. Mayors up and down the country will be delighted to help out, but given Spain’s terrible record of municipal corruption, how much of that cash will end up in the wrong pockets?

The theory is that town halls will stimulate the economy by spending 8 billion Euros on small infrastructure projects that cost no more than 5 million Euros. This should also help mop up construction sector unemployment by giving residential construction workers new jobs in public works projects, killing two birds with one stone.

The problem is that many of Spain’s town halls can’t be trusted to spend the money without nicking some of it. With so much public money being spent at once, and in haste, corrupt local officials will be rubbing their hands in delight at the prospect of a bumper year for kick backs in 2009.

Furthermore, the idea that public infrastructure projects will help dig Spain out of recession is fundamentally flawed. Even if they rush the public tender process like never before, which in itself means less scrutiny and better opportunities to plunder the budget, the bulk of the spending will arrive too late to help fight the recession.