Spanish Property Collapse

The collapse of the Spanish property sector and bad management has led to over 400 out of the over 8,000 municipalities in Spain to stop paying their water, electricity and telephone bills.

According to sources from the FEMP (Spanish Federation of Municipalities and Provinces) the next step will be that salaries will stop being paid and by the end of 2010, around 30 per cent could declare bankruptcy.

In Andalucia, two out of three municipalities are on the brink of bankruptcy says the Federation.

According to recent reports, the crash of the Spanish property sector caused the local municipalities to lose 15,000 million euros per year.

In 2006 for example municipalities saw incomes of over 16 thousand million euros thanks to the property business, while in 2009 this income drop to a meagre 2.5 thousand million euros.

Photo credits: ansik.