Catalonia taps bailout fund for additional aid

The regional government of Catalonia has asked to tap the central administration's bailout fund to the tune of a further 410 million euros, taking its total petition to 5.433 billion. The Generalitat’s economy department, headed by Andreu Mas-Colell, explained that as the Regional Liquidity Fund (FLA) also covers debts related to healthcare, education and social affairs, the decision was taken to increase the amount initially requested.

The department confirmed that the central government has green-lighted the additional funds. Catalonia has already received the first tranche of its request, 1.039 billion euros, of which 568 million was immediately allocated to cover costs in education and healthcare, with the remainder destined to meet debt maturities. The Generalitat’s spokesman, Francesc Homs, said that the receipt of the funds would cover maturities that have been pending “since June” but added there was no timetable in place to pay pharmaceutical providers owed 99 million euros.

Last week, the Generalitat blamed the central government for delays in sending through the first tranche from the FLA and also complained that, as a result, it was unable to pay Social Security quotas for September, for which it was subsequently fined 24 million euros.

The tenure of Artur Mas as regional premier has been characterized by large-scale protests against spending cuts, which were played out against the backdrop of mass walkouts by public sector employees. In a recent meeting with Mariano Rajoy, Mas asked to no avail for Catalonia to be granted a fiscal pact in line with the Basque Country, by which the region would enjoy greater control over its own finances. In recent weeks, focus in the region has shifted to the issue of self-determination. Mas has called early regional elections for November 25 and promised to pursue a referendum on the subject early in the next legislature.