With the backdrop of the countrywide crisis in place, the Spanish regions of Catalonia, Castile-La Mancha, Murcia, the Balearic Islands, the Canary Islands and Andalusia will have to repay millions over the next few months.



To help the regions face these due dates the government has made credit facilities available, known as the Regional Liquidity Fund. The first to make use of the scheme has been the Valencian Community, and it seems unlikely that it will be the last. Catalonia, Castile-La Mancha, Murcia, the Balearic Islands, the Canary Islands and possibly Andalusia (amongst others) are all struggling to face these repayments of millions due to the harsh conditions demanded by the lenders.  However, participation in this scheme is not something that will be taken lightly as the funds bring with them challenging budgetary conditions too.



Debt repayments of more than 15.8 billion euros are expected to be tackled before the end of the year. These include lending, credit lines and debt security. What's more, a further debt of 15 billion will have to be made official in order to finance the allocated deficit for this year. According to government data from the autonomous regions, those with most to repay are Catalonia (5.75 billion), Valencia (2.9), Andalusia (1.6), Madrid (1.3), La Rioja (940 million) and Castile-La Mancha (705 million).  Due to the complexity of the credit systems in place, not all of these figures can be counted on to be 100% accurate.



The treasury adviser of Castile-La Mancha was particularly frank about their plan to use the credit facilities and said ‘We are very worried about the community’s treasury’. On Sunday it was confirmed that Murcia too would make use of the funds, although not until September, and would ask for between 200 and 300 million euros. Contrastingly, the Balearic president, José Ramón Bauzá, stated that his region was not beyond salvation and ruled out asking for the Government’s help.



It’s not been an easy period for regional governments. In the last few weeks, banks have put the brakes on credit in the hope that the State would put into place the liquidity fund. As a result, available liquid assets have evaporated. Most communities have begun to decrease regional costs but income is in free fall. Income from inheritance tax, normally key as it is controlled by the government themselves, fell by nearly 23% between January and April this year.



Whilst on one hand offering these credit facilities, the Treasury is also tightening the screws on autonomous regions so that they speed up checks on their public accounts. They are continually threatening official inspection and their criteria is becoming stricter every time.



In Navarra, despite the tough measures being taken and everybody feeling the squeeze, no such economic help is needed and it continues to be one the regions in the best shape in Spain.