The blocks of townhouses, some clear beige, others in red brick, flank the almost intact silhouette of the XV century castle in the distance. The roundabout leading to Pioz (Guadalajara), about 55 kilometres northeast of Madrid, is marked with signs warning of a dangerous intersection and of lanes leading to housing developments. Everywhere crop up clusters of new houses built in the fury of the housing boom.

Trascastillo, El Bosque del Henares, Valcastillo, Las Suertes, Montealto, La Arboleda, Los Charquillos, Madrebuena. Some are half-empty. Similar scenes litter many other parts of Spain. The one thing special about Pioz is that it is the most indebted town in the country. According to its mayor, Amelia Rodriguez (PP, Popular Party, conservative) the municipality is carrying a debt of no less than 16 million euros – on a budget of two million euros.

7,058 years

In the midst of the day-to-day maelstrom of the crisis, Pioz is a small-scale example of the failure of the development model that has prevailed in recent decades in Spain. A village that in the mid-nineties had less than 1,000 inhabitants invested millions in the hope of becoming a bedroom community of 25,000. That never happened. Today Pioz has 3,800 registered residents and a gaping hole in its finances.

Being identified as the most indebted town in Spain by its own mayor, however, has not pleased most of the lifetime residents. And more than one is wondering why Amelia Rodríguez was so diligent in identifying their town as the town that would take 7,058 years to pay off its debt through Spain’s Plan de Pago a Proveedores (Plan for Payment to Suppliers) that was alluded to a few days ago by the Secretary of State of Public Administration, Antonio Beteta – especially since Beteta spoke of a ‘town in Guadalajara’, but took great care not to name names.

“I’m not saying either that it’s this town – only that it might be,” clarifies the mayor of Pioz, conducting the interview with great seriousness while declaring herself “sick of interviews” and very busy. Amelia Rodriguez, 45, black hair cut short and wearing dark pants and a pink blouse, seems well aware of the uproar caused by her complaint.

“I agree that it’s not good for the town, but what do I do? Shut up?” That wouldn’t be the style of Mayor Rodriguez, who has more than two decades in municipal politics behind her. In July 2011, shortly after being elected mayor, she sent out circulars to all the administrations exposing the dire situation of local finances.

“There are the bills,” she says, pointing to a pile of white folders stacked on a shelf in her office. The debts run into the hundreds of thousands of euros, for supplies and maintenance, for street lighting, town-planning consultancy, school cleaning and outstanding payments on the municipal swimming pool.

Choose between bullfights or school heating

Of the latter, according to Rodriguez, only 300,000 euros were paid, and the invoice with interest well exceeds one million. Faced with the bills, “this year I had to cancel the bullfights, because I had to choose between the bullfights or heating the schools in winter,” says the mayor, who insists that her complaint is not political. “It’s not about whether the government was the PSOE or the PP. It's about having half a brain,” she says, alluding to Emilio Rincón, her predecessor as mayor.

Rincón, town councillor for the Regionalist Party of Guadalajara in 1999 and mayor until the last election in 2011, first with an independent grouping, then with the PSOE, passionately defends his administration against the “lies” of his successor. To start, he slashes the real debt in half. “In the adjustment plan adopted at the plenary the talk was of 5.4 million euros, which would be 80 percent of the debt, or approximately eight million euros – there’s nothing there about 16 million euros.”

The former mayor, who worked in construction and is now unemployed, is one of the two Socialist councillors of Pioz following the split in the party and the creation of Ciudadanos por el Cambio (CuC, Citizens for Change), which won four seats on the Council and has made a common front with him on this issue. “The mayor is talking about bills, but she isn’t producing them. We’ve been asking to speak to the auditor for a year now and we haven’t succeeded,” Vladimiro Pastor, CuC spokesman at the Town Hall, says by telephone.

Much of the town’s debt comes from the water treatment plant, built after the adoption of planning scheme in 2003. The bill for it, about 5.5 million euros, was about to be taken over by the outgoing regional government. Why was it not done in stages? For the construction industry, it was a time of plenty. From the late nineties, “the voter rolls doubled every three or four years,” Pastor says.

All the projects ground to a halt

And the Town Hall rubbed its collective hands. “We were thinking of building about 7,000 homes in order to get up to 25,000 inhabitants,” says Rincón, 49, in the Los Cazadores bar, run by a family member. “People were coming from Madrid and the Henares Corridor to buy homes here. We could have got up to at least 10,000 registered voters.”

Urban planning called for an infrastructure plan: water treatment, sewage collectors, lighting. “An investment of 12 million euros, of which eight million were paid in,” said Rincon. There also came the swimming pool, the cultural centre, and the medical centre, all essential to a bedroom community of 25,000. But in the summer of 2007 the wind abruptly changed. “The promoters put a freeze on the construction when they saw that the first phase wasn’t selling,” recounts the ex-mayor, and all the projects ground to a halt.

“Still, the town has benefited from all that. From the pool and the health centre, which used to be just stables, and the cultural centre, which has a library and a very nice event hall.” The speaker, Emilio Varela, owner of a central bakery and neighbour to one of the empty estates in Pioz, is appalled at all the controversy, even though the library has been closed for months because the librarian has been on sick leave and the brand-new medical centre is open only in the mornings; for emergencies, patients have to head for neighbouring Chiloeches.

But the Cervantes cultural centre is up and running, and, says Varela, it has helped knit together a town where most residents come from somewhere else. Although they don’t quite add up to the dream of 25,000, they are a small fraction of what the borrowed money was planned for.