What is going on at Madrid City Hall?

Madrid Mayor Manuela Carmena has fired her economy chief Carlos Sánchez Mato after the latter refused to back an adjustment plan for the financially embattled city, the accounts of which have been under central government oversight since early November.

After two years of failing to meet budget targets, the city of Madrid was informed at that date by Finance Minister Cristóbal Montoro that all its transactions would be supervised on a weekly basis by ministry officials.

Sánchez Mato, of the United Left (IU), was removed from his post at the helm of the Madrid Economy and Tax Department after he announced that he would not be supporting a municipal adjustment plan to bring down spending imbalances in the Spanish capital.

“I cannot have a tax chief who does not support his own proposal,” said mayor Carmena, whose Ahora Madrid leftist coalition includes Podemos, IU and green parties.

“Mr Sánchez Mato told me that even though he had introduced the proposal for the new economic plan himself, he did not want to see it approved, and he said that he would walk out during the vote,” said Carmena. “I cannot have the tax councilor not approving the proposal that he himself proposed to the Council.”

His substitute, Jorge García Castaño of Podemos, said that the new plan will allow the city to implement many investment projects that had been on hold.

The new adjustment plan – the fourth in two years – foresees that Madrid will meet spending ceiling targets by 2018, and slash €564 million in spending as demanded by Minister Montoro. In exchange, the state will allow the city to overshoot its spending limit by €100 million this year, and it will also drop action against what it views as illegal financial maneuvering by the local government worth €274 million.

Besides Mato, several other local councilors had expressed their rejection of the adjustment plan. Three of them, Guillermo Zapata, Celia Mayer and Javier Barbero, threatened to walk out of the executive.

Madrid city accounts have been under central government oversight since early November after two years of failing to meet budget targets

The internal conflict over the city’s finances is set against the backdrop of the 2019 municipal elections. Ahora Madrid has been heading a minority government since 2015, when it earned 20 seats in the local council – one fewer than the Popular Party (PP), but enough to get Carmena into the mayor’s office thanks to support from the Socialist Party (PSOE).

This time, Ahora Madrid had to resort to the PP for support for the adjustment plan. The PSOE and Ciudadanos rejected the measure, citing poor management of the “crisis” between Madrid and the Finance Ministry.

The mayor says that she wants to “depoliticize” Ahora Madrid with a view to the 2019 elections, and make it once again “a neighborhood candidacy.” If she fails to revive this “spirit of 2015,” Carmena may decline to run for re-election.

English version by Susana Urra.