Spanish Regions Line Up for Aid

Requests for emergency loans from three regions adds to pressure on Prime Minister Rajoy.

The Spanish region of Murcia became the third to say it will need emergency loans, and Valencia signaled it needs funds to cover current and past overspending, adding fiscal pressure on Prime Minister Mariano Rajoy.

A day after Catalonia said it needed 5 billion euros ($6.3 billion) from an 18 billion-euro bailout fund announced by Rajoy last month, an official in southeastern Murcia yesterday put its needs at 700 million euros. In Valencia, an official who asked not to be named in line with policy confirmed remarks by economy chief Maximo Buch to Europa Press that 3.5 billion euros would cover only current needs.

ECB Involvement

The four also used over two-thirds of another mechanism that prevented regional defaults in the first half, an approximately 5 billion-euro credit line from the Spanish government’s bank Instituto de Credito Oficial, or ICO. The region with the highest deficit last year, Castilla-La Mancha, hasn’t yet decided whether to tap the new fund.

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