- Andalusia requests 1bn euros from Spanish government!
Spain’s Andalusia has become the latest region to request a financial lifeline from the central government. The region had asked for 1bn euros (£791m) worth of aid to be granted immediately, said Susana Diaz, a senior politician from the region.
Valencia, Murcia and Catalonia have requested bailouts in recent weeks. Meanwhile, Spain said that it will immediately inject 4.5bn euros into Bankia, the lender that the government was forced to part-nationalise in June.
Bankia was created in 2010 from a merger of seven troubled regional savings banks, but was rescued this summer when it was on the verge of collapse. “By this measure, we restore the group’s regulatory capital while the restructuring plan is completed and guarantee the security of deposits and the group’s access to all possible sources of financing,” Spain’s bank bailout fund said.
Last week, Valencia said it would ask for 4.5bn euros in bailout money, more than had been suggested when it first made the plea earlier this summer. Debt-ridden Catalonia has asked for a bailout of 5bn euros, while Murcia has said it will need 300m euros.
A 18bn-euro public fund was set up by Madrid to aid its 17 autonomous regions, which are in deep debt. The conditions which the Spanish government will impose on loans from the fund have not yet been announced.
But Mario Jimenez, the spokesman for the Socialist Party (PSOE) in Andalusia’s left-leaning coalition government, warned against trying to impose a “corralito”, which refers to capital controls and harks back to Argentina a decade ago, when its government froze bank accounts in order to prevent bank runs.