Spain’s total debt has risen nearly five percent over the course of a year, another cause for concern after the country agreed a 100 billion euro bailout for its banks over the weekend. In addition, Spain’s borrowing rate remains dangerously close to seven percent – a level deemed unsustainable in the long-run by analysts.
The lastest figures show debt was 72.1 percent of GDP for the first quarter of this year, up up from 68.5 percent for the same period in 2011.
The government expects the rate to hit 80 percent by the end of the year, but is giving some regions loans to deal with their debts.
Speaking at a press conference, Deputy Prime Minister Soraya Saenz de Santamaria outlined the details.
“The government has authorized 14 autonomus regions to borrow an amount of over seventeen and a half billion euros. This represents the amount of debt that these autonomous communities have to pay according to the bills that they’ve given us,” she said.
The 14 regions allowed to borrow from the central government have all committed to austerity measures, with the aim of slashing their budget deficits.