Debt 'cushion' funds of €4.6bn for Spain's 17 regional governments

SPAIN'S 17 regional governments will receive a total of nearly €4.6 billion towards covering their debts from 2015 and increasing their deficit margin for 2016, according to minister for the treasury Cristóbal Montoro.

This means the total payable by Madrid to the regions covering the 2016 financial year for this purpose will come to over €31.5bn.

The additional funds include the €1.64bn surplus from the central government's Regional Liquidity Fund (FLA), aimed at compensating for the 17 Parliamentary cabinets' failure to meet their deficit targets for the year 2015, and another €2.91bn to help them meet these in 2017.

For this year, debt targets for the regional governments have been relaxed slightly, from 0.3% of the GDP to 0.7%.

The sum of €1.64bn will be paid to those regions which have not had to call upon the FLA to stay afloat financially in 2016 – nine in total.

Andalucía will receive just under €170 million; Aragón €79m; the Balearic Islands €118m; Cantabria 43.4m; Castilla-La Mancha €57m; Catalunya €415.5m; Extremadura €105.4m; Murcia €126.4m, and Valencia €524.6m.

Town councils which have had to resort to central government loans to make ends meet – 44 in total – will receive just under €120m.

Out of the remaining €2.91m to help regions reach their debt targets of 0.7% of their respective GDPs in 2017, the highest amount will go to Catalunya at €843.5m and Andalucía, at €598m, followed by Valencia at €419m.

Much smaller amounts will go to Galicia (€230m); the Canary Islands (€174.4m); Castilla-La Mancha (€155.4m); Aragón (€139.3m); Murcia (€114.3m); the Balearic Islands (€113.5m); Extremadura (€72.5m), and Cantabria (€50.2m).

Photograph: Treasury minister Cristóbal Montoro (left) and deputy president Soraya Sáenz de Santamaría (centre) at the December meeting of the government's Council of Fiscal and Financial Policy