Friday, November 12, 2010

Before You Leave The Crisis Make Sure You Pay Your Toll

For some it doesn't seem to matter how bad the crisis gets, they always land on their feet. The banks, of course, are the shining example of this philosophy that says profits must be privatised for the benefit of the (very) few whilst all losses get picked up by society as a whole. Other companies have clearly learnt the lesson of this, the latest example being those that have the concessions to run toll roads in Spain.

These companies probably thought they were onto a guaranteed winner with their concessions, but it appears that not enough motorists are paying the tolls to compensate for a change to the law on compensation for expropriated land that was introduced by Aznar's government. This change meant that landowners had to be compensated based on possible future changes in the value of their land rather than just the value at the time of expropriation. I would hate to speculate on the possibility that any wealthy PP supporters benefited enormously from this, so let's knock that idea firmly on the head.

Sadly it seems to have been a law based on the assumption of a never ending bubble for all involved, but don't worry because it will be those most affected by the cutbacks in government spending who may well get to pick up a tab estimated at €800 million. It doesn't matter that the major shareholders of these companies are the same construction companies who did fabulously well out of the boom years, the companies concerned are now - to use a phrase popularised by a prominent Madrid politician - "pobre de pedir". I'm sure those who have had their pensions frozen this year will understand that there are needs much greater than those of the retired.

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