Catalan Government and town halls will pay € 2.79 billion in pending bills from 2011

Barcelona (ACN).- The Catalan Government and many town halls throughout Catalonia have applied for €2.79 billion in loans offered by the Spanish Government to pay for their arrear payments of all the bills issued earlier than January 1^st 2012. The Spanish Government announced on March 9^th that it was providing €35 billion for the Autonomous Communities and the municipalities to pay for their pending bills from their service providers and material suppliers. The Spanish Institute of Official Credit (ICO) and private banks will offer the funds with an interest rate of 5% over 10 years, and they do not have to pay anything in the first two years. The Catalan Government has asked for €1.98 billion to get rid of 268,489 pending bills in its own departments, as well as the public companies and agencies dependent on the Catalan Executive. This amount represents 11.48% of the total funds applied for by the Autonomies, which represent €17.255 billion. All the Autonomies have applied for funds except three, which have refused to do so: the Basque Country, Navarra and Galicia. The latter has elections next year and is being receiving favourable treatment by the Spanish Government’s budget proposal for 2012. Navarra and the Basque Country are the only two with a special economic agreement that makes them contribute with less money to Spain’s territorial fiscal scheme. The €35 billion was also available for town halls. Many Catalan municipalities have presented their pending bills, which total €803 million.

The Catalan Government and many municipalities throughout Catalonia have presented 450,000 bills to the Spanish Finance Ministry in order to apply for the corresponding amount via the €35 billion credit scheme. These 450,000 bills total €2.79 billion and represent 7.96% of the total funds available. Catalonia has a GDP representing around 19% of Spain’s economy and 16% of Spain’s inhabitants.

Paying for these bills to create 8,000 jobs in Catalonia

The Spanish Employment and Social Security Minister, Fátima Bañez, who was in Barcelona on Tuesday, said that the €2.79 billion will contribute to “overcoming a difficult moment” and “leaving the crisis behind”. She also believed that paying these bills to service providers and material suppliers would create 8,000 jobs in Catalonia, although she did not detail exactly how.

Báñez also talked about the labour market reform, which she thinks is “functioning well”. The Minister said in the first 9 weeks of implementation, 14,000 ‘supporting entrepreneurship’ contracts, a new type of contract created by the reform, had been signed. 20.9% of which were signed in Catalonia, she announced.

€17 billion for the Autonomies and €18 billion for the municipalities

The Spanish Government had foreseen splitting the €35 billion in loans in two parts: roughly €17 billion for the Autonomous Community Governments and €18 billion for the municipalities. In total the Autonomies have presented bills totalling €17.255 billion. The Autonomies represent on average 36% of Spain’s total public spending, although some Autonomies such as Catalonia have more devolved powers and thus its public spending share is higher. Local governments represent 13% of public spending, while the Spanish Government is directly responsible for the remaining 51%.

The Valencian Community presents bills for €4.07 billion

The Catalan Government has applied for €1.984 billion to pay for 168,489 in pending bills, while it is the Autonomous Community with the highest budget in Spain, responding to Catalonia’s economic and demographic size and the high level of devolved powers. However, it is far from being the Autonomous government applying for the highest credit amount. The Government of the Valencian Community (traditionally called the Valencian Country) tops the ranking. It has presented 578,000 bills totalling €4.069 billion. It is followed by Andalusia, which has the second largest budget. The Andalusian Government has applied for €2.763 billion. The Government of Castile-la-Mancha is third on the list with €2.510 billion.