The national government agreed yesterday to pay the bills that regional and municipal governments cannot cover on time. In essence, it is offering them a loan that they will have to pay back later with interest. Thus, the national government will clear up a lot of pending payments for the smaller administrations are behind on, which has had an adverse effect on service providers working across all levels of government.
This issue has been a double-edged sword, and Montoro wants to make it clear to the smaller governments that they need to meet their deficit goals, cut spending and pay their bills on time. Strangely, even though financing is getting cheaper, regional debt continues to mount, mostly because they have resisted necessary cutbacks and Rajoy and team keep letting this slide.
