Regions' unpaid bills reach the 50-billion-euro mark

The total sum of bills unpaid by regional and local governments has hit the 50-billion-euro mark, five percent of GDP and four times more than two years ago, according to EL PAÍS' calculations.

"We are at the limit, the consequences will be devastating," said the heads of the different associations of the affected companies, which are not being paid for services rendered.

The failure of the Castilla-La Mancha government to pay pharmacies in the region for the past two months led to the closure of drugstores in protest last Thursday and has unleashed a war between the local Popular Party administration and pharmacies.

The fall in government revenues, the reluctance to break the political taboo of raising taxes and the determination of central government to keep regional spending in check to bring down the deficit are the main causes of the problem, which has become a nightmare for thousands of firms across the country.

The non-payments most affect construction companies working on public projects - which are owed a collective 15.05 billion euros, according to industry employers' organization Seopan - and freelancers - 14.983 billion - as well as the pharmaceutical, waste collection and cleaning industries, 5.450 billion and four billion and one billion, respectively.

Pharmacies, which are facing a default of 383 million euros in Castilla-La Mancha, Murcia, La Rioja and the Balearics, are among the groups that are refusing to take the non-payments sitting down. Last Thursday, 700 drugstore owners in Castilla-La Mancha closed their doors to protest against the unpaid bills by María Dolores de Cospedal's regional government.

Municipal administrations are those that delay the longest in handing out the checks, according to all the business leaders consulted by this newspaper. They take an average of 238 days to pay construction companies, for instance, more than three times what it takes a company to repay its loans to a bank (75 days), according to the Platform against Late Payments. Central government takes an average of 140 days to pay and the regions 155 days, says Seopan.