Spain's Andalusia region seeks rescueComment on this story
Spain's indebted Andalusia region said Monday it would seek central government aid with a one-billion-euro ($1.3 billion) “advance” to provide liquidity.
Andalusia, the most populated of Spain's regions, reached out for the rescue as it buckles under heavy debts and struggles with a towering 33.9 percent unemployment rate.
Spain's government has said it plans to set up within weeks an 18-billion-euro liquidity fund for troubled regions, which suffered an explosion of debt after the 2008 property crash.
As interest rates spiral higher, some of the 17 regions are struggling to meet debt repayments.
While waiting for conditions of the regional rescue fund to be established, Andalusia government official Susana Diaz said it would require an “advance” of one billion euros so as to provide “liquidity””
Diaz's comments, given to journalists in Seville, were confirmed by a regional government spokesman.
Andalusia becomes the fourth region to announce it will seek aid from the central government.
In July, the southeastern region of Murcia said it would need help, later priced at 300 million euros.
Last week, the northeastern Catalonia region, whose capital is Barcelona, said it would seek 5.0 billion euros and the eastern region of Valencia said it would need at least 4.5 billion euros.
The spokesman for Andalusia did not want to give a figure for the total amount to be sought.
The region posted in the second quarter a public debt of 15.4
billion euros, equal to 10.6 percent of its total economic output. It faces debt repayments of 1.61 billion euros in the second half of 2012.
Andalusia said it had still not decided whether to ask for money from the central government's rescue fund but admitted that commercial banks were pressuring it to do so. -Sapa-AFP