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| Valencia's hopes remain grounded as it bids for bailout | Valencia's hopes remain grounded as it bids for bailout |
| (7 months later) | |
| The shiny new airport at Castellón sits fenced off and empty among fruit and olive trees, with the only aircraft in sight a model jet that crowns a bizarre sculpture with a passing resemblance to Toy Story's Mr Potato Head. | The shiny new airport at Castellón sits fenced off and empty among fruit and olive trees, with the only aircraft in sight a model jet that crowns a bizarre sculpture with a passing resemblance to Toy Story's Mr Potato Head. |
| Eighteen months after the airport in the eastern region of Valencia was officially inaugurated by Carlos Fabra, the local boss of the conservative People's party (PP) and now head of the public company that runs the empty airport, the first commercial flight is yet to land. | Eighteen months after the airport in the eastern region of Valencia was officially inaugurated by Carlos Fabra, the local boss of the conservative People's party (PP) and now head of the public company that runs the empty airport, the first commercial flight is yet to land. |
| But Fabra has ensured his own glory will live on with a costly folly, a sculpture originally inspired by the politician himself. | But Fabra has ensured his own glory will live on with a costly folly, a sculpture originally inspired by the politician himself. |
| "The joke going around this week is that they landed on Mars before they got to Castellón," says José Daniel, the pony-tailed pump attendant at a local garage whose owners once hoped would fill up hundreds of tourist hire cars a day. "People are upset. We all thought jobs were coming to our doorstep, but who knows if it will ever open." | "The joke going around this week is that they landed on Mars before they got to Castellón," says José Daniel, the pony-tailed pump attendant at a local garage whose owners once hoped would fill up hundreds of tourist hire cars a day. "People are upset. We all thought jobs were coming to our doorstep, but who knows if it will ever open." |
| After the regional government in Catalonia said this week that it needed a €5bn (£3.9bn) bailout from the central government in Madrid, Castellon's €150m airport is a dramatic symbol of public waste in another Spanish region that has seen its banks collapse, its deficit soar and, amid corruption scandals and a profusion of white elephants, been described as Spain's answer to sickly Greece. | After the regional government in Catalonia said this week that it needed a €5bn (£3.9bn) bailout from the central government in Madrid, Castellon's €150m airport is a dramatic symbol of public waste in another Spanish region that has seen its banks collapse, its deficit soar and, amid corruption scandals and a profusion of white elephants, been described as Spain's answer to sickly Greece. |
| An hour south down the motorway running along the Mediterranean coast, past an existing airport, a second shiny new building pokes up from orange groves on the outskirts of the city of Valencia. The €26m hospital in Lliria, with 120-beds and six operating theatres, was meant to open three years ago, serving the city's hinterland, but it is also fenced up and protected by security guards. | An hour south down the motorway running along the Mediterranean coast, past an existing airport, a second shiny new building pokes up from orange groves on the outskirts of the city of Valencia. The €26m hospital in Lliria, with 120-beds and six operating theatres, was meant to open three years ago, serving the city's hinterland, but it is also fenced up and protected by security guards. |
| "Our new hospitals will open when the people of Valencia can permit themselves the luxury of opening them," local health boss Luis Rosado admits. | "Our new hospitals will open when the people of Valencia can permit themselves the luxury of opening them," local health boss Luis Rosado admits. |
| That is unlikely to happen soon. With a deficit of 4.5% of local GDP and its debt given junk status by ratings agencies, Valencia urgently needs a bailout, along with half a a dozen other Spanish regions. | That is unlikely to happen soon. With a deficit of 4.5% of local GDP and its debt given junk status by ratings agencies, Valencia urgently needs a bailout, along with half a a dozen other Spanish regions. |
| Valencia says it needs €3.5bn from the regional bailout fund. "The more we can get, the better," regional finance boss Máximo Buch said on Wednesday. | Valencia says it needs €3.5bn from the regional bailout fund. "The more we can get, the better," regional finance boss Máximo Buch said on Wednesday. |
| Now that Spanish banks have won their own €100bn bailout from Europe's rescue funds, the 17 regional governments are the biggest threat to Spain's stability and may push it into a full bailout in the autumn. | Now that Spanish banks have won their own €100bn bailout from Europe's rescue funds, the 17 regional governments are the biggest threat to Spain's stability and may push it into a full bailout in the autumn. |
| Regions are responsible for 40% of public spending, providing health, education and other basic welfare. Last year, despite government calls for austerity, they increased their deficit as tax and other income tumbled. | Regions are responsible for 40% of public spending, providing health, education and other basic welfare. Last year, despite government calls for austerity, they increased their deficit as tax and other income tumbled. |
| Valencia was one of the worst culprits. This year, it has been ordered by Madrid to cut its deficit by two-thirds or it will face government intervention. It is implementing huge cuts but, despite the wielding of the knife, economics thinktank Fedea sees it and most other regions overshooting, meaning Spain may miss the 6.3% overall deficit agreed with Brussels for this year. | Valencia was one of the worst culprits. This year, it has been ordered by Madrid to cut its deficit by two-thirds or it will face government intervention. It is implementing huge cuts but, despite the wielding of the knife, economics thinktank Fedea sees it and most other regions overshooting, meaning Spain may miss the 6.3% overall deficit agreed with Brussels for this year. |
| As the local economy crumbles and unemployment hits 27% (2% above the national average), Valencia already holds the country's record for home repossessions – higher even than the more populous areas of Madrid, Andalucia or Catalonia. | As the local economy crumbles and unemployment hits 27% (2% above the national average), Valencia already holds the country's record for home repossessions – higher even than the more populous areas of Madrid, Andalucia or Catalonia. |
| The repossessed homes and many brand new, unsold houses built by bankrupt developers and funded by local banks that have collapsed are likely to end up belonging to a national, state-owned "bad bank", the framework for which will be announced by on Friday. | The repossessed homes and many brand new, unsold houses built by bankrupt developers and funded by local banks that have collapsed are likely to end up belonging to a national, state-owned "bad bank", the framework for which will be announced by on Friday. |
| "That was the model here. Instead of investing in industry and agriculture, in research and exports, all the money went to speculation – and now it has gone," says Enric Morera, leader of the green Compromis coalition in the local parliament. | "That was the model here. Instead of investing in industry and agriculture, in research and exports, all the money went to speculation – and now it has gone," says Enric Morera, leader of the green Compromis coalition in the local parliament. |
| He rejects, however, comparisons with Greece. "It is not that huge sums of local money have been wasted. It is that the politicians in charge have behaved like the nouveau riche, bragging about everything they did," he said. | He rejects, however, comparisons with Greece. "It is not that huge sums of local money have been wasted. It is that the politicians in charge have behaved like the nouveau riche, bragging about everything they did," he said. |
| But corruption scandals saw the previous head of the regional government, Francisco Camps, pushed out by his own party, the PP. Prosecutors believe that funds set aside for developing world charities may even have been pocketed by those in charge. | But corruption scandals saw the previous head of the regional government, Francisco Camps, pushed out by his own party, the PP. Prosecutors believe that funds set aside for developing world charities may even have been pocketed by those in charge. |
| Examples of the consequences of the financial crisis can be found across the region. | Examples of the consequences of the financial crisis can be found across the region. |
| Last week, at four o'clock in the morning, the cars carrying those leaving a lengthy board meeting of regional public broadcaster RTVV were greeted by 200 workers who pelted them with eggs before walking off in tears. The board had just agreed to sack 1,200 of them. | Last week, at four o'clock in the morning, the cars carrying those leaving a lengthy board meeting of regional public broadcaster RTVV were greeted by 200 workers who pelted them with eggs before walking off in tears. The board had just agreed to sack 1,200 of them. |
| With a workforce of 1,700 people and an audience share of less than 5% of Valencia's 5.1 million inhabitants, the broadcaster had become a bloated loss-maker with €1.2bn of debt. | With a workforce of 1,700 people and an audience share of less than 5% of Valencia's 5.1 million inhabitants, the broadcaster had become a bloated loss-maker with €1.2bn of debt. |
| "There were often days when I had nothing to do at work," says union representative Yolanda Díaz, a post-production technician. "I'd take in a book or something to study. There are people who have studied for entire university degrees in there." | "There were often days when I had nothing to do at work," says union representative Yolanda Díaz, a post-production technician. "I'd take in a book or something to study. There are people who have studied for entire university degrees in there." |
| Díaz blames the PP, which has governed the region for 17 years, for filling the broadcaster up with friends of , Vicente Sanz, the politician who ran it for 15 years and was once caught on a wiretap saying he was in politics to get rich. Its two radio stations and three television channels have become simple propaganda outfits for the local government, she says. | Díaz blames the PP, which has governed the region for 17 years, for filling the broadcaster up with friends of , Vicente Sanz, the politician who ran it for 15 years and was once caught on a wiretap saying he was in politics to get rich. Its two radio stations and three television channels have become simple propaganda outfits for the local government, she says. |
| "It was the government who built up the debt, not the workers," she says. "But it is those who are not to blame who must pay with their jobs." | "It was the government who built up the debt, not the workers," she says. "But it is those who are not to blame who must pay with their jobs." |
| RTVV is also at the centre of a corruption cases involving a visit by Pope Benedict XVI in 2006. Inflated contracts to cover the event were handed to companies who, in turn, allegedly paid generous backhanders. Five senior managers await trial. "Nepotism is a word invented for the Borgias, and they were from Valencia," said Morera. "The PP has lived up to that." | RTVV is also at the centre of a corruption cases involving a visit by Pope Benedict XVI in 2006. Inflated contracts to cover the event were handed to companies who, in turn, allegedly paid generous backhanders. Five senior managers await trial. "Nepotism is a word invented for the Borgias, and they were from Valencia," said Morera. "The PP has lived up to that." |
| A new regional boss, Alberto Fabra, is vowing to eradicate corruption and is trying to balance the books. | A new regional boss, Alberto Fabra, is vowing to eradicate corruption and is trying to balance the books. |
| Prime minister Mariano Rajoy attempts to blame Spain's ills on José Luis Rodríguez Zapatero, the socialist prime minister until last November. But his words fail to convince in Valencia. | Prime minister Mariano Rajoy attempts to blame Spain's ills on José Luis Rodríguez Zapatero, the socialist prime minister until last November. But his words fail to convince in Valencia. |
| "They like to blame Zapatero but, in Valencia, they are the inheritance," said Ximo Puig, head of Valencia's socialists. "This isn't Greece, but the damage done to our reputation is serious." | "They like to blame Zapatero but, in Valencia, they are the inheritance," said Ximo Puig, head of Valencia's socialists. "This isn't Greece, but the damage done to our reputation is serious." |
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