Spain's most indebted village pays the price of its profligacy And the pool? It is lined with a film of green algae which floats on stagnant water that won't be cleaned in time for the hottest months - because the council coffers have run dry. This is Pioz, the town in the Guadalajara province of Castilla-La Mancha which has now earned the unwanted distinction of being the most indebted in Spain. In fact with its projected income, Spain's Ministry of Public Administration estimates that Pioz will take 7,058 years to repay itsdebts thanks to mismanagement and a vast programme of overspending during the boom years when credit flowed and developers stampeded to put up housing estates they could never realistically hope to fill. While eyes across Europe focus on Greece and the political turmoil that threatens to derail it, Spain's government has been working to restructure its banking sector and reassure markets that the nation won't need a bail-out. It is in the small towns across this country that the real story of Spain's troubles can be found. Pioz has become the symbol of a crisis-hit nation where town councils have run up debts that far surpass their income, debts which threaten to derail the government's attempt to meet strict budget deficit targets set by Brussels. "We are crippled by debt," explained Dionisio Torres Martinez, the spokesman of Pioz town hall. It is impossible to exaggerate how big our problems are here. In the short term we are just struggling to find the funds each month to pay for the very minimum of services, let alone meet our debt repayments. It is a tale of hubris and mismanagement that echoes across all of Spain. Where once the fictional Don Quixote tilted at windmills, the administrators in this corner of Castilla-La Mancha had embarked on a far more damaging madness. Some three miles from the historic centre of this town of 3,800 residents a gleaming water purification plant squats between fields of wheat. "It looks great doesn't it?" remarked Juan Yunta Ayllon, the town councillor in charge of Public works, Services and the Environment for Pioz, surveying the site. And so it should. It came with a bill of 11 million euros and yet do you see anyone there, any sign of life within its gates? The place is abandoned because the council has no money left to operate the electricity pumps to supply the plant or to the pay the employees to run it, as a result the water supply to the town frequently cuts out. A recycling centre next door, funded in part by a grant from the European Union, likewise stands gleaming and vacant. We couldn't finish the road to allow the trucks to reach the site with the rubbish. The whole project is useless. So too is the swimming pool which was opened in 2008 and came with a price tag of 2.3 million euros. "There is no money, not a spare cent, to spend on maintenance of such a luxury," explained Mr Yunta. At night the street lighting is not switched on, road maintenance has been halted and rubbish collection is intermittent. The town owes 16 million in outstanding bills to suppliers and is one of 2,619 councils applying to the central government for help to meet repayments. The current mayor, Amelia Rodriguez, from Prime Minister Mariano Rajoy's conservative Popular Party, was elected last June and inevitably blames the previous socialist administration for running up the unsustainable debts. "We are just trying to cope with what we have to do now to survive," she said. But the number of residents just cannot supply the income needed to run a town that has expanded so quickly and now lies half empty. The town suffers 25 per cent unemployment, the national average, and at best estimates it could put aside 2,000 euros a year to pay outstanding debts after meeting just the bare minimum of running costs. Yeah, life was good here. It's a beautiful place," says Ignacio, a man in his 30s, who arrived in the town square on a battered old bicycle. I had two cars, a new house, lots of work in construction and I thought it would never end. Now I'm unemployed and live with my parents again. Its empty houses - an estimated 600 new builds lie vacant - are gradually being looted, an expression of discontent by the town's unemployed youth and opportunism by itinerant thieves. On one urbanisation at the far end of Pioz, all the electrical wires have been ripped from the properties, their shutters and windows stolen and the bathroom and kitchen fittings gone. Many of the construction companies that built the new estates are in liquidation and the banks have been left with toxic assets of properties they are unlikely to ever sell, even at rock bottom prices. The spectacular bust in 2007 of Spain's decade long building boom has left troubled banks burdened with an estimated 185 billion euros in problem loans and assets. On Friday they were ordered by Mr Rajoy's government to set aside another 30 billion euros to shore up loans on top of a 54 billion euros fund ordered in February. "It's all very well the government rescuing banks with public money," said Eugenio Rodriquez Barco, another resident of Pioz remarking on the part nationalisation of Bankia, Spain's fourth largest bank, last week. But we need to a plan to bail out the town halls as well otherwise Spain will collapse. The picture for the country appears bleak and the figures speak for themselves. Spain has slumped into a second recession with its economy predicted to shrink a further 1.7 per cent this year. Its government has slashed public spending, cutting budgets by 27 billion this year, in a desperate attempt to reduce its public deficit to 5.3 per cent this year from 8.5 per cent in 2011. The government is struggling to convince Brussels and the markets that it can meet the harsh demands of the eurozone's other finance ministers to save itself from following the fate of Greece, Ireland and Portugal and asking for an international rescue. More protests loom against stringent cuts in health and education as well as public sector pay and a freeze on pensions and the number of jobless threatens to rise beyond the 5.6 million Spaniards currently seeking work. Alarmingly, more than half of Spain's 18-25 year-olds are unemployed. Silva Barrios, a 45-year-old resident of Pioz, said she worried most for her daughter's future. She is 18-years old and just starting her adult life but what hope is there for her? There is no work here so she will mostly likely move abroad. It's very sad. As austerity measures bite across the country, for those in Pioz some local cut backs go just too far. The annual bullfighting fiesta, the jewel in the crown for many a community across Spain, has been cancelled this year and seems unlikely to be reinstated for the foreseeable future. "I've been through some bad times over the years let me tell you," said elderly resident Sergio, sipping a beer at the bar on the town's square. But to cancel the fiesta? I never thought in my lifetime that things could get so bad as this. Let me die now from the shame of this disaster we have created. Edward Hugh, an independent economist based in Barcelona, said: "Spanish debt is reaching critical levels and the country is going to have a terrible time complying with measures imposed in Brussels. We need to see a clean up across the board and what Spain's population don't quite seem to understand is why these swingeing cuts are needed. There is a danger of it spiraling out of control. "To put it simply," he added. You can't fix this mess with chewing gum and chicken wire.