The National Federation of Autonomous Workers’ Associations (ATA) has estimated that the various public administrations owe €14,983 million to the self-employed, a new record.
Adding to this is the fact that the self-employed have advanced over €1,800 million in IVA, meaning that small businesses and the self-employed are effectively financing local administrations rather than the other way round. It is no wonder that so many small businesses are getting into financial difficulty or going under.
As to payment terms, while the rest of Europe seems to be reducing the payment period to the self-employed, Spain is going the other way. The average payment period by regional or provincial governments is now 178 days while with municipal authorities it is 298 days before debts are settled.
Cataluña with €2,756 million owing to small businesses, Andalucía with €2,442 million, Comunidad Valenciana with 1,740 millio and the Comunidad de Madrid with €1,736 million account for nearly 60% of the total outstanding debts.
As one has seen on numerous occasions recently, large corporations such as Endesa and Telefonica can cut the supply to administrative bodies when the outstanding debts get too high, but the small businesses do not have such leverage.