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The white elephants that dragged Spain into the red

Updated Friday, July 27th 2012 at 00:00 GMT +3

Europe has already bailed out Spanish banks, now Spain's regions are clamouring for money from central government - and one of the reasons for this is their lavish spending on white elephant building projects, such as the airport at Ciudad Real, south of Madrid.

It has one of the longest runways in Europe but today there are no planes, only hawks and falcons gliding in the still heat over the arid yellow landscape of Don Quixote's Castilla La Mancha.

Rabbits pop up around the state-of-the-art terminal, built of steel, glass and gleaming white concrete.

The airport of Ciudad Real opened in 2008 but it closed in April 2012. The luggage trolleys are now trussed together in the car park gathering dust and cobwebs.

It is not the only white elephant to stomp across Spain's landscape. It is merely one of the herd, a monument to the country's burst construction bubble which brought down its banks.

When a local construction magnate came up with the idea of an airport in Ciudad Real, money was sloshing around Spain for public works.

It was the 1990s and every town in every region had a grand project to set itself apart and bring in the visitors. Bilbao was getting its own Guggenheim museum, so why shouldn't Ciudad Real have its own airport?

"We had an attack of wealth, we didn't know how but suddenly we were rich," says Miguel Angel Bastenier, senior columnist at the left-of-centre daily El Pais. "There was such a frenzy for investing money and people got inebriated."

The airport in Ciudad Real was to be a private project, for private profit, but the business people behind it had no problem getting political support.

Before their collapse, Spain's local savings banks (the cajas), were different from other banks in one crucial way - local politicians sat on the board. So companies needed political support for large projects to encourage the cajas to invest.

Both the main political parties were in favour says Santiago Moreno, a spokesman for the socialist PSOE party which controlled the regional government at the time.

"Expert studies commissioned by the airport investors said it would create 6,000 jobs and a boom for the economy. There would have been a before and after for Ciudad Real."

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