If this crisis has clarified anything, it is that the socialist government has been buying the Instituto de Crédito Oficial's snake oil as a cure-all for economic woes. Now the ICO is offering financing to the regional governments so that they can pay for part of the debt they owe the federal government, a debt obligation that would later on would be returned to the regional governments and leave them with even more financial burdens. If that were to happen, the volume of credits from the ICO would be raised by 6% of the Spanish GDP, a figure that is too large for this institution, whose resources and personnel do not increase in proportion to increase in operations. Further, the Spanish government is evading the fact that spending and government debt has to be cut back in order to offer more credit at a higher cost.
