- Created on Saturday, 17 September 2011 09:01
The Portuguese National Institute of Statistics (INE) and the Bank of Portugal have discovered gaping holes in Madeira’s finances.
Unreported costs and Debt Rescheduling Agreements (DRAs) have escaped the scrutiny of the two regulatory bodies which in turn have accused the government of Madeira of having omitted key information from its public accounts reporting, calling it an unprecedented and “serious” situation.
The INE and the Bank of Portugal said they had discovered Debt Rescheduling Agreements worth €571 million relating to 2010 of which they had not been informed, and €290 million of interest arrears, again unreported.
There was also €11m in rescheduled debts payments falling due this year from 2005 and €32 million interest arrears from 2011, all unreported. Madeira’s health service overspends of €99 million from 2008 to 2010 have been hidden.
The figures are a major setback for the Lisbon government which has been implementing several austerity measures in order to control its own budget deficit; it clearly has no grasp on Madeira's finances.
With some embarrassment the Ministry of Finance has stated that the situation is ‘being assessed’, that it will set an austerity programme specific Madeira’s unfolding crisis and has demanded effort of Maderia’s politicians and population to curb excesses and bring the situation under control. The truth is that Madeira is out of control financially and politically and there is nothing effective that Lisbon can do about it until Jardim is voted out.
Alberto João Jardim, the bellicose president of Madeira admitted, with masterly understatement, the island is facing ‘liquidity problems’ but vowed to keep on spending and to not sack any public servants. He made no comment on the massive misreporting of the island’s true position nor the concealment of huge debt. His parliament had the gall to ask the Government in Lisbon for more money in early September and Finance Minister Vitor Gaspar has said the financial position of Madeira is being scrutinised and should be made public prior to the next regional elections.
How the electorate vote for Jardim time and time again, he has been President since 1978, must be explained by a weak opposition and voters’ delight in being bought by consistent overspending on healthcare and public services. The next regional election is on the 9th of October.