The Financial Times has been added to the voices which warn that the fragile state of Catalonia’s public debt may severely affect the Spanish government’s efforts to curb its economic crisis.
The newspaper estimated that Catalonia, one of Spain's 17 autonomous communities, needs to raise up to 11 billion euros ($14.93 billion) in debt this year to meet its currents deficit, which hit 3.6 percent, a figure that must be cut in half to meet regional limits.
Catalonia’s finance minister claims that this situation is a legacy of the newly nationalist tripartite agreement that has been governing the region since the last local elections. This statement evokes that of Greek accountants when the country inherited the deficit that finally led it to needing economic assistance.
The Financial Times also claims that Catalonia’s problems could disrupt efforts by Spain and the eurozone to solve the current situation. The report said Catalonia’s economy is the size of Portugal’s.
In order to neutralize the situation, the finance minister in the region advises that “they will try in both international markets and Spanish credit market.”
Catalonia’s financial trouble helps explain why Spain calculates last year’s overall public sector deficit at 9.2 percent of national GDP, only slightly better than its original target, even after it exceeded its goals for cutting the central deficit
The Spanish prime minister is making use of the country’s 17 autonomous regions to convince bond market investors that his government can implement its austerity program and bring its public finances under control.
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