Spain’s northeastern region of Catalonia has asked Madrid for just over five billion euros in rescue aid from a central government fund.
Catalonia, which generates almost a quarter of Spain’s economic output, is the most indebted of the regions, with over 40 billion euros in repayments due this year.
The authorities in the region’s capital, Barcelona, said they would not accept any political condition from the central government in return for the money.
Madrid has already imposed tough deficit targets. In response the Catalan government has cut public sector wages, introduced a one-euro charge for every medical prescription and frozen infrastructure investments.
The huge debts of Spain’s 17 semi-autonomus regional governments are the main reason why the financial markets fear the country will be forced to seek a full EU bailout.
The regions of Valencia and Murcia have also said they would need to tap the fund.
The government said in July it was setting up a mechanism to help the regions repay their debts, using funds from the state lottery and bank loans. But the facility is still not up and running.
In all, some six regions are expected to need central government help to meet deficit targets and pay service providers.
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