Balearic debt at new historic level

Furthermore, confirmed the Bank of Spain, the regional debt is now 16.9 percent of gross Balearic product (PIB) and means that the Islands are now the region of Spain with the fourth highest level of debt. Only Valencia, Catalonia, and Castilla-La Mancha have a greater public deficit.

Looking purely at public companies and local authorities, debt in the second quarter this year stood at 690 million euros, 2.2 percent less than during the same period last year. Local authority debt also declined in the second quarter in comparison with the first of 2011 when it stood at 710 million euros.

But the Bank of Spain pointed out that public company debt is still 2.2 percent of gross regional product.
National debt soars
Analysing debt across the country as a whole in the second quarter this year, the report shows that regional debt has grown by 23.5 percent in comparison with the same period in 2010 to reach 133'172 million euros (12.4 percent of gross product), an historic record.

Auditors have shown that since 1995, the regional deficit across Spain has continually increased, and each year the levels of debt reached create their own new records. This is despite national and regional commitment to stabilising public spending made in recent years.

The amount of money owed by public companies and national authorities increased by 16.5 percent in the second quarter of this year in comparison with the second three months of 2010. It now stands at 702'806 million euros and is equivalent to 65.2 percent of gross national product.

The region of the country with the highest public deficit registered between April and June this year was Catalonia with 38'530 million euros. The figure represents an astonishing 28.9 percent of the total of all regional debt in Spain.

In second place, with the next highest level of debt in the country is Valencia which is 20'547 million euros in the red. Third place is occupied by Madrid with 14'798 million.

These three regions alone accounted for 55.47 percent of the country's entire regional debt in the second quarter of this year.
Spain's Vice-President and Economy Minister Elena Salgado met Balearic Economy Minister Aguiló at the end of last week in Madrid to discuss how fiscal control in the Balearic Islands should fall in line with Central Government's overall programme to introduce austerity measures and bring down the public deficit.

The European Union has said that it is control of regional financing that will be the key to capping debt levels rather than imposition of limits from Central Government.