Italian city declares bankruptcy after corrupt waste and class struggles

Alessandria City Hall

From Struggles in Italy:

Alessandria: the first Italian city to face bankruptcy

After Sicily’s initial fears of bankruptcy which were settled with extraordinary state funding, for the first time an Italian city went bankrupt. Alessandria, in the northeastern Piedmont region, has 100 million euros of deficit. The missing money wasn’t spent on extraordinary investments, but for ordinary expenses: 600.000 euros in flowers, a trip to Moldavia, private jet flights, promotional videos, a 12.000 truffle given to ex-PM Berlusconi and 34 people hired in a state funded company without any sort of competitive entrance examination, just few months before the local elections.

The ex-mayor Piercarlo Fabbio (PDL), that run the city in the last 5 years, and some ex town Councillors are now under investigation for tax fraud (“Danno erariale”) and state treasury fraud (“Truffa ai danni dello Stato”). On the 27th of June the city was officially declared bankrupt and state insolvency inspectors has been appointed to manage the city finances.

The crucial point of the issue is the crackdown imposed on the state owned (but locally managed) companies in charge of garbage collection and disposal, public transport and other services (school canteens, tax collection etc); a total of 500 public workers that the city can’t afford to pay anymore. The new mayor Rita Rossa(PD) asked for state aid, and after the refusal she thought of starting a hunger strike. Her final solution was a partnership with Legnano Bank, that would give to the workers 3 monthly wages, with the possibility of a monthly renewal. The bank only imposed two conditions: that the workers open a free bank account at their bank, and that if the city doesn’t pay the debt, the workers will, including interest but after the 6th month.

This plan caused massive strikes in the city: initially only by the waste collecting company, on the 28th of August, and joined by the other workers from transport and multi-service companies the following day. On the 29th the train station was occupied and trains were not permitted to enter or leave by strikers lying on the rails.

Even if the city administration passed to the state inspectors, the mayor managed to unfreeze 650.000 euros from special funds to pay august salaries. On the 31st the transport and waste companies were back in service.