The president of Andalucia, José Antonia Griñan, defended his choice to vote against deficit and debt restrictions that the Council of Financial and Fiscal approved for Spain's regional governments. He has spouted a populist argument and, following in Catalonia's footsteps, has managed to get support from the Andalusia public.
Griñan also said that if the Ministry of Finance's cutbacks are carried out, Andalusia will shut down its high schools and hospitals, laying off over 60,000 workers in the process. This seething rhetoric was egged on by socialist party leader Alfredo Pérez Rubalcaba.
Apart from the different debt ceilings that the regional governments have, Andalusia's president obviated the insufficient cutbacks carried out up until this point for the regions and Andalusia's own government, which could make it possible to get 2.7 billion euros that the region needs in order to square its accounts. In all, and considering his feeble arguments, Griñan has the option to draw from the Autonomous Liquidity Fund, which is a pool of money available to Spain's regional governments, without taking on any additional requirements. This action would solve the region's liquidity shortage.
The near-term risk of Andalusia, Catalonia, Asturias and the Canary Islands rejecting the national government's aid proposal is affecting service providers and companies that after having recently billed over 27 billion euros in invoices thanks to the resources from the Official Credit Institute (ICO is the Spanish acronym) could once again have to deal with non-payment from the government and have to cut jobs because the regions can't meet their agreements. If these four regions continue to rebel against the state, Spain should show its strength and cut off their funding as they prepare to enact an intervention.
