Spain's Regional Bailout Fund: A Drop In A Bucket Of Insolvency
It will come as no surprise to many that the initial size estimates of Spain's regional bailout fund are now being questioned. The government is now 'analyzing' whether the EUR18bn 'temporary' bailout fund needs to be increased. In a word - Yes! As this chart from Bloomberg Briefs shows, the size of the 'help' is pittance compared to the debt-loads of Catalonia alone (which recently sought secession). As Bloomberg's Niraj Shah notes, Spanish regional elections in the Basque country and Galicia take place on Sunday, followed by a ballot in Catalonia on Nov. 25. Prime Minister Mariano Rajoy may prefer to seek a bailout after the elections as a series of defeats for his People’s Party could exacerbate investor concerns about the government’s ability to control spending and revenue and bring down the deficit. Perhaps our 'context' update on Spain's situation last night was rather prescient after all?
In what seems like a remarkable coincidence:
- Spanish region of Asturias will seek EU261.7m from central govt’s rescue fund for regions
Source: Bloomberg Briefs