Anyone who thinks that Valencia will ever be back on the Formula 1 calendar is an optimist. The race may have drawn some more tourists to the city, but the spending involved was colossal. The race was not supposed to cost the taxpayers anything, but the money that was supposed to come from private developers never appeared and the local government had to chip in $104 million. To that was then added another $319 million in race fees, infrastructure costs and so on.
The Grand Prix was only one of a number of flashy projects which marked the region’s recent history and which have left it with a debt burden of $38 billion. Now, as Spain cuts back on everything and raises taxes, in an effort to get out of the mess created by the regions, there are a string of corruption cases hanging over the local politicians. No-one wants the government to spend money and there was an outcry in January when the regional government stepped in to save the Valencia soccer team, which had failed to repay a $100 million loan. In the circumstances, the idea that the Grand Prix might return, even in a alternation agreement with Barcelona, seems far-fetched. There have also been reports that much of the F1 infrastructure been stripped out by locals, looking to sell everything they can to make ends meet.
Miraculously, the one region which has more debt than Valencia is Catalunya, which boasts a 30 percent bigger population and is more industrialised but it still has a debt of $67 billion. The regional government says it has worked hard to find a way to balance the books and is in the process of agreeing terms with Bernie Ecclestone to run the Spanish GP for next few years. The Catalans, if nothing else, get a bigger crowd than in Valencia.
The Central Bank of Spain says that the country’s debt burden is now at 84 per cent of Spain’s annual gross domestic product with a debt pile of $1.14 trillion. It is expected that the percentage will rise to more than 90 percent this year. Were it not for Fernando Alonso, Spain would be gone from F1…