Government debt ceiling condemns Andalucia to yet more cuts

LAST UPDATED: 2 Aug, 2012 @ 17:08
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Government debt ceiling condemns Andalucia to yet more cuts

By Rund Abdelfatah

THOUSANDS of schools in Andalucia could close if central government goes ahead with its bailout proposals.

Andalucian officials, who are opposing the move, have warned that lowering the debt ceiling will condemn the region to more cuts.

“The decision could mean the closing of 2,000 schools, 19 hospitals or the dismissal of up to 60,000 public servants,” said a spokesman.

It comes after the Council of Fiscal and Financial Policy (CPFF) has agreed to limit town hall debt by inflicting a wave of new cuts.

In particular Junta president Jose Antonio Grinan criticised the government for preventing Andalucia from raising its borrowing rate to 15.1%.

The disagreement is centred on what Grinan views as a serious limitation to Andalucia’s borrowing capacity.

At the beginning of 2012, Andalucia’s rate was 9.8% – one of the lowest in Spain – but while Grinan desires a 15.1% debt ceiling, the CPFF has drawn the maximum at only 13.2%, which means the region would lose €2,735 million of funding.

Grinan complained the decision was taken ‘without warning’ and accused central government of applying unfair treatment toward Andalucia.

“They discriminate against Andalucia and all the communities which, in the past, reduced our debt while they benefit those who did exactly the opposite.”

“It is not a contest between the central administration and the autonomous communities. That’s a smoke curtain: an attack on education and health is public,” he added.

The argument represents yet another roadblock on the way to a bailout for Andalucia.

2 COMMENTS

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  1. Grinan should absolutely be allowed to raise the ceiling to 15.1%. On one condition. Andalucia should be responsible for collecting it’s own revenues otherwise it’s just more politicians wanting their cake and eating it while expecting someone else to make it, pay for it and clear up the mess.

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