Balearic government cuts its debt

The total debt at the end of 2018 was 8,723 million euros. The debt has not grown to a great extent since the current government came into office. At the end of 2015, when the government was working from a budget set by the Partido Popular, it was 8,330 million. That debt level represented 30.4% of GDP; this has now dropped to 28%.

The debt is enormous by comparison with what it had been at the start of the century (509 million euros). The 2003 to 2007 government of Jaume Matas has been blamed for adding to debt in order to pay for various projects such as the Palma Metro. While it is true that the debt doubled over that period, it was only 1,789 million by 2007. The PSOE-led government of Francesc Antich saw it rise to 4,774 million by 2011, while the Bauzá PP government pushed it up to the 8,330 million figure in 2015.

That acquisition of debt by the Bauzá government was important because it was borrowing from Madrid. The Balearics required a bailout from the liquidity fund. Prior to this, the debt was solely owed to financial institutions or was in the form of bonds. The current Balearic government has of course been seeking some generosity from Madrid in either getting the debt commitment cut or written off. The debt to Madrid is well over half the total debt.