surinenglish

MPs vote against Madrid spending council savings to help bail out national finances

Minister for Taxation María Jesús Montero during the debate.
Minister for Taxation María Jesús Montero during the debate. / SUR
  • Town halls have some 14 billion euros in total in their bank accounts that they aren't allowed to spend currently

The government has suffered a defeat after MPs failed to back a scheme to use local council savings to help bail out national finances.

Town halls have some 14 billion euros in total in their bank accounts that they aren't allowed to spend currently. Some 500 million of this belongs to Malaga province councils. The money comes from long-term savings, hoarded as part of strict budgetary responsibility laws set centrally in 2012.

MPs in Madrid rejected on Thursday a new law that would have let councils spend five billion euros of these savings, in return for giving it all over to central government first.

Only coalition partners, PSOE and Unidas Podemos, backed the plan.

Despite agreement to the idea from the local government association (FEMP), there had been stiff criticism at both ends of the political spectrum.