Government reacts to 'unfair privileges' accusation by regions

 

The socialist government of Spain has agreed to be more lenient with the regions instructions to cut debt following their complaints to central government about certain 'unfair privieges' extended to Catalonia.

The Ministry of the Economy was reacting to complaints by both PP and Socialist regional representatives, and announced that the regions would now be able to refinance debt later this year regardless of whether they had reached the target of 2.4% of GDP previously imposed on them.

Elena Salgado, Spain's Minister for the Economy, confirmed that the regions are free to refinance debt maturing later this year as this did not necessarily mean an increase in debt levels. El Pais reported today how all 17 regions were permitted to do this last year, and there has been no change of policy for 2011.

The decision to allow Catalonia to refinance was a slap in the face to other regions - some of whom have Socialist administrations - with the Premier of Castilla-la-Mancha calling the move 'discriminatory'.

The Catalan region had initially complained and asked permission to extend it's lending due to huge levels of debt run up by the previous administration, which was granted.