Regional governments warned to 'correct spending' before New Year

Valencia, Andalucía, the Balearic Islands, Murcia, Catalunya, Aragón, Navarra, Castilla-La Mancha, Cantabria and Extremadura have all been warned they have overstepped their budgetary limits.

'Lax' spending could 'put debt targets at risk', the letters say, and the regions affected have been ordered to explain the 'causes of any possible diversion' from expenses limits and the measures they intend to take to contain and 'correct' their budget issues.

Minister for the Treasury Cristóbal Montoro points out that according to the Law of Budgetary Stability and Financial Sustainability, regions which 'fail to comply' could face 'preventive, corrective and coercitive' measures.

Madrid, region number 11, has been sent a letter reminding it that it has reached its 2.1% spending limit and requesting information about 'forecasts for expenses evolution' between now and the end of the calendar year, and warning of the 'risks of possible non-compliance'.

January will see the central government work on a new regional Parliamentary funding system.

The written warnings are likely to be met with annoyance by some regional governments, who consider they are sorely underfunded.

One of these is the Valencia region – made up of the three Mediterranean provinces of Castellón, Valencia and Alicante – which has long complained of drawing the short straw in terms of finances, especially as it is one of the most tourist-heavy and developed regions in Spain.