Debt-stricken Catalonia eyes Spanish bailout aid

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Debt-stricken Catalonia eyes Spanish bailout aid

Debt-stricken Catalonia eyes Spanish bailout aid
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Overspending by Spain’s 17 autonomous regions is one of the reasons behind the country’s economic woes.

During a property boom, they raked in a large amount in tax revenues, which were largely spent on costly infrastructure projects.

Now the bubble has burst and the regions are unable to manage their massive debts.

Catalonia, Spain’s economic powerhouse, owes some 45 billion euros.

The country’s wealthiest region accounts for one fifth of economic output.

Officials there want to join Valencia and Murcia in requesting aid from a 18 billion euro state fund.

But a spokesman for the regional government insisted that it should not be described as a bailout.

On Thursday, MPs in the region’s parliament voted for more fiscal autonomy.

Catalonia contributes 25 percent of Spain’s taxes and parliamentarians argue a greater share of that money should be spent at home.

The new system would kick in from 2014, which the current regime expires.

But any change would require the central government’s approval.