Spain
Pressure continues on Greece and Ireland, which received substantial EU and IMF financial bail-outs packages in 2010. Now European central bankers and bond investors continue to express concern over Spain’s situation. In particular, there are concerns over the growing debts of the devolved regions such as Catalonia and Valencia.
José Luis Rodríguez Zapatero, Spanish prime minister, in an interview with the FT today, confirmed that the country’s 17 autonomous regions must curb public spending and debt creation so that Spain can recover from its sovereign debt crisis.
According to the Central Bank of Spain, Spanish regional debt doubled to €105bn ($140bn) in the last five years, compared with €541bn for the central government. Regions have autonomy over half of public spending, mainly on health and education; central government is responsible for a third of the social security budget.
Spain’s regional banks have already been restructured from 45 to 17 in number. They are now required to produce detailed reports of their exposure to property investments, some of which are believed to be troublesome, by the end of this month.
