Tiny Murcia was on course yesterday to be the second Spanish region to request help from the central government to keep it afloat, as media reported half a dozen local authorities were ready to follow in the footsteps of Valencia.
How Spain’s 17 indebted autonomous regions, locked out of international debt markets, will manage to refinance €36 billion in debt this year has been a major source of concern for investors ever since they missed deficit targets last year. Spain’s central government set up an €18 billion fund earlier this month to ease their funding pain.
Asked in a newspaper interview whether Murcia planned to tap the fund created, the head of the local government, Ramon Luis Valcarcel, answered “of course”. Murcia later sought to row back from the comments, saying it was studying the possibility of using the funding mechanism but had not made a decision. – (Reuters)