Business | Economy
Boom goes bust in Valencia region
Once thriving area now gripped by austerity cuts, corruption scandals and protests
- AFP
- Published: 00:00 February 13, 2012
Valencia: Once a shining example of Spain's economic boom, Valencia generates grimmer headlines now: corruption scandals, huge debts, austerity cuts and ensuing popular protests.
One photograph encapsulated the happier days: Valencia regional government chief Francisco Camps sitting alongside the city mayor, Rita Barbera, who is all smiles at the wheel of a Ferrari.
The image, republished recently in the leading daily El Pais, harks back to the days of opulence of this eastern, orange-growing region on the Mediterranean coast.
At the time, both politicians were patting themselves on the back for negotiating the arrival of the Formula 1 Grand Prix in Valencia, after having hosted yachting's America's Cup.
"They used to say Valencia could be the California of Europe," recalls Miguel Angel Vera Mora, a local representative of one of the major Spanish unions, the CCOO.
Major events
"They told us we were the first in almost everything," added Conrado Hernandez, regional secretary-general of the UGT union.
Valencia profited handsomely from a property boom.
"There had been an export-oriented Valencian industry, but we redirected it entirely to the property sector," said Juan Sapena, director of the Valencia University business studies institute.
Since then, Camps has had to quit his job as regional government president to battle a corruption probe, in which he was acquitted. Two other corruption cases related to financing of the local right-wing are under way.
More than anything, there was the bursting of the property bubble. The region, a powerhouse in the Spanish economy, found itself saddled with a public debt of €20.5 billion (Dh99 billion), equal to 19.9 per cent of its total economic output, the highest in the country.
Liquidity problems led to extraordinary scenes. In the past weeks, pupils in several state schools have taken lessons wearing hats and covered in blankets. Supplier bills had not been paid and the heating was cut off. To put the books right, the region announced January 5 tax increases and cuts in publicly owned enterprises, health care and education, amounting to €1.1 billion.
Popular protests erupted soon after. In the latest action on Saturday unions called protests at the Castellon airport, the "City of Light" film studios in Alicante, the Terra Mitica amusement park in Benidorm and the Agora congress centre in Valencia.
"They are four symbols of how to waste public money," said Vera Mora of the CCOO union.
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