By Mark Baber
March 12 – The European Commission has opened a formal investigation into the financial affairs of Valencia, Hércules and Elche after their recent bail-outs from local government.
A mountain of unrepayable debt has hit football clubs in Valencia, the local government and the Spanish banks. Now, according to El Pais, [http://elpais.com/elpais/2013/03/08/inenglish/1362771733_140699.html?rel=rosEP] the whole system of loans to soccer clubs employed across different tiers of government – regional, provincial and municipal – is under the spotlight of the Competition Commission, headed by Spanish EC vice president Joaquín Almunia.
If the state aid is found to violate European competition the clubs may be forced to pay the money back, which would likely lead to their demise.
As second line of enquiry for Almunia has been the non-payment of tax and social security contributions. The array of grants and privileges awarded to clubs in Spain amounts to what investigators in Brussels term “the Spanish soccer bubble.”
Dutch clubs, including PSV are also under scrutiny, with decisions expected within a year.
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