Canary Islands seek bail out

The Canaries has become the sixth Spanish region to seek a bailout from Spain’s central government’s rescue fund. The region’s economic commissioner, Javier González Ortiz, said at the weekend that the Canaries has requested a 756.8 million euro loan from the Autonomous Liquidity Fund (FLA), which is being set up with resources of 18 billion euros. Ironically, the Canaries have the lowest debt per capita ratio among the country’s 17 regions; but, needs to make up for state budget cuts earlier in the year amounting to 448 million euros. President, Rivero said that this was one of the best options as it has better terms than normal financial institutions.

The FLA will be in existence until the end of this year. González Ortiz insisted that they were using the FLA because the funding conditions were more accessible than those currently available in the market, “not because the region’s solvency is in doubt.”

He added that it is also the region with the poorest state funding. The Canary Islands’ petition brings total requests from the country’s cash-strapped regions to around 16.3 billion euros.

President Paulino Rivero said that Madrid will not impose conditions for the assistance, It’s still a bailout, though, and the Canaries joins Andalucia, Catalonia, Murcia, Castilla-La Mancha, and Valencia in requesting help to a total of just over €16 billion.

The Canaries chief executive says “we go to the loan that articulates the state because it has better terms than those offered by financial institutions.”

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Posted by on Oct 8 2012. Filed under Local News, News Alert. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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