Local authorities in the Alicante region have managed to clear much of their debt, even amid a challenging period that followed the covid outbreak. The latest figures from the Ministry of Finance and Public Functions show that the total debt for local governments in the area stands at 216.8 million euros. The decline marks a solid decrease over the last two years and follows a period when the broader economy faced disruption, the productive fabric slowed, and social stability was strained. Yet some municipalities have moved forward, trimming their red numbers and in a few cases turning them into positive outcomes.
Data released by the department led by Maria Jesus Montero indicate that, at the end of the 2019 fiscal year, municipalities bordering Alicante carried a combined debt of 311.2 million euros; this figure was nearly 30 percent higher than at the end of the last full year, 2021, according to ministry reviews.
Two municipalities in the province carry notably higher liabilities than their peers, specifically the county seats of Marina Alta and l’Alcoià. Denia, with a population just over 41,000, tops the list. Its council, led by Vicent Grimalt, posted red numbers of 24.4 million euros by the end of 2021. In l Alcoià, the town with about 60,000 residents, the debt sits at 23.9 million euros under the administration of Toni Frances. The third position on the list is a debate between Bigastro and Monóvar, each managing about 15 million euros of liabilities.
The red numbers for these towns contrast with the more favorable balances seen in other large municipalities within the province, which show notably different financing pictures. Alicante city, led by Luis Barcala, reported a loan of 200 thousand euros at the end of 2021. Elche, under Carlos Gonzalez, has accumulated more than six million euros in debt. Orihuela owes about seven million. In Torrevieja, Elda, and Villena different patterns emerge, with Elda recording a debt of 54 thousand euros and Villena showing zero debt among several county seats.
Experts point to a variety of reasons behind the poorer debt indicators for Alcoy and Denia. In Alcoy, Vanessa Moltó, the Under-Secretary of the Treasury, argues that the overall burden is not excessive since debt levels are the lowest they have been in two decades, although the figure has surpassed 40 million euros. The mayor notes that debt as a percentage of the municipal budget sits around 45 percent and adds that borrowing is not inherently dangerous so long as it remains below about 75 percent. The key challenge, he says, is balancing essential city projects with available income.
In Denia, the debt situation is linked to penalties tied to urban matters. Paco Roselló, the town treasurer, cites a 35 million euro liability connected to convictions. Some of this amount has been paid with local funds, while the remainder has been financed through new borrowing. The municipality is currently pursuing its General Plan, a project yet to be completed, which adds to the financial strain.
Registering the Generalitat’s red numbers
Across the Valencian Community, debt levels reached historic highs at the end of 2021, even as municipalities managed to reduce their indebtedness to the lowest marks seen in the last decade. By December 31 of that year, the Generalitat reported debts of 53.82 billion euros, while autonomous municipalities stood at 1.218 billion euros, about 265 million euros less than the pre-pandemic period. The trend diverged this year, with the Community still extending its overall debt while consortia moved in the opposite direction. In the first quarter, the Generalitat reduced its debt by 771 million, yet it remained the most indebted autonomous community by GDP terms.
The argument around the Valencian Community’s financing hinges on insufficient funding. The regional government, led by Ximo Puig, has pointed to this gap as a primary driver of rising debt, with plans to reintroduce an item of 1.3 billion euros in the 2023 budgets to address underfunding. The regional Courts commission investigating debt also notes that a lack of financing accounts for roughly 75 percent of the total burden.
Quick cleanup after puncturing the real estate bubble
The debt levels seen in Alicante’s town halls today differ markedly from those a decade ago, when the financial crisis and the real estate downturn pushed many administrations toward collapse. In 2011, the province’s councils carried a combined debt of 928 million euros. Through adaptation plans, the spending rule governing surpluses, and the local government sustainability law, debt was scaled back and now sits at about one fifth of that peak. The finance framework has helped stabilize budgets while keeping essential services intact.