The national government?s latest budget proposals should go forward smoothly if president Zapatero doesn?t abandon Moncloa prematurely. The president will not close any doors or prepare any path to add all possible aid on the nationalist front. Conversations with the Basque Nationalist Party are centered on giving this party more power. Instead, the Catalonians are trying to govern under the weight of significant regional debt, which has already reached 34.323 billion euros and tops the list of all struggling regions.
To mitigate the debt burden and wink at CiU, Spain?s Secretary of Labor Valeriano Gómez (who in the State of the Union debate gave a solid "no" to the 2012 budget) opened the door to invest part of the Social Security Reserve Fund in regional government debt.
In response to CiU
Gómez affirmed that for now "there is no reserve fund percentage that could divert us from absorbing territorial supply." But he emphasized that there is no legal constraint to doing so. The secretary of labor responded to questions from a CiU spokesman, Josep Antoni Duran i Lleida. Last Tuesday, Duran urged the treasury to manage a sale of regional government bonds in order to avoid paying an extra fee that Catalonian government pays for selling its debt to investors. If the sale were done by the department of treasury, it would be cheaper.
At this point, the Generalitat has issued 5.7 billion euros in national bonds via two placements. The first with José Montilla (3 billion euros) and the second with Artur Mas (2.7 billion euros).
Then, the president got a loan for 4 billion from Santander at 5.7% over the course of four years and an international issuance for another 4 billion at 5.37% for two years. The rest sold on the market with bonds at a rate of 4.25% for one year and 4.75% for two years, which was added to a 3% commission from the company that processed the deal.
Translated and Edited in English by Brandon Dyches and Jose L. De Haro
