Op-ed: Hidden debt swells even more

Yesterday was the deadline for Spanish town councils to present pending service provider invoices that were charged before January 2012, and this deadline will arrive soon for regional governments. The invoices will be used to determine to what extent a national government payment plan will help the companies who are owed money by regions and town councils. As of now, the companies will receive 35 billion euros of what they are owed.

If the money does not materialize and subcontracts become an issue, self-employed and corporate workers could become disgruntled, causing a sober impact on the economy. But the problem does not stop there.

The providers assure that there is another 35 billion euros owed to them, but hidden in town council and regional government accounts. In the middle of 2011, after local and regional elections, some administrations had already consumed their entire budget funding for the entire year.

If an administration does not have enough money to pay their debts and they transfer them to the next fiscal year, it should note this in the "cuenta 413" of their budget, which was established as a release valve for this kind of problem, with knowledge of the intervention and accounting that reflected that. It's not like it hasn't happened before. Once again governments have opted to hide invoices under the rug and let their debt pile higher and higher. On May 15, when the service providers check if their invoices are on the list of those to be paid, the 2011 debt that governments are hiding will float out from under the rug.

Separate from the measures that the national government is adopting to fight against this practice, so that it won't become a habitual bad practice, the government needs to facilitate a process for companies to charge in full and not be left with any pending invoices. This would not only fix irregular billing practices that hinder our economy, but also improve our credibility outside of Spain.