Balearics assesses state of finances, plans to rein in debt

Speaking after a government meeting, Bosch said that accounting is being finalised but that in the meantime, all government members, most of all the Partido Popular President Jose Ramon Bauza, remain “concerned”.

The outcome of the audit, said Bosch will determine the nature of measures that the government will have to take to respond to the real economic state of the region.

Repayment
Bosch said, however that the guiding light of the economical restructuring that the government needed to undertake, was the repayment of its debts to suppliers and local institutions. He insisted that the Executive would remain on course to honour its commitments.

The spokesman said that there was ongoing contact between the regional and Central Government about the best way to modify the current budget - which was rolled over from 2010 without Parliamentary approval - to accommodate the deficit.

He explained that once the audit was complete and a new course of action decided on, Central Government should release funds to stabilise the regional economy and financial institutions should lighten their “strict control” so that credit can start flowing more freely.

All local government institutions, said Bosch, whether it be municipal councils, island councils or the regional executive, need to do whatever is needed to achieve stability.

At this point, Bosch saw fit to admit that getting the 240 million euros which is owed to the Balearic government to boost regional competitivity is not going to be easy.

He said that to convince Central Government of the commitment that the new Executive has assumed to bring debt and spending unter control, Balearic President Jose Ramon Bauza is to make sure that the budgets of all the various institutions that depend on regional funding are realistic and attainable.

In order to achieve this aim, the Balearic government is considering merging currently separate authorities so that “important steps” can be taken to implementing austerity measures, Bosch said.

He furthered that once the true state of finances had been registered, a timetable would be set out for Parliamentary debate so that government repayment of debts to suppliers, and particularly to small and medium-sized companies could become a matter of legislation as opposed to one of political expediency or convenience.

Bosch also made reference to the 150 million euros worth of credit that the previous Balearic government had verbally arranged with banks for use by the incoming Executive. “This needs to be firmed up,” he said.