Spain is drowning and the request for a European lifesaver may no longer be postponed. In the first eight months of 2012 the deficit grew by 23% on an annual basis: in August it reached 50,132 billion euros, equal to 4,77% of GDP (in July it was 4,62%). The new figure derives from a 1,7% reduction in revenues (60,106 billion euros) and a further increase in expenses, which increased by 85% (110,238 billion euros).
Thus the government's objective of bringing the deficit back to 4,5% by the end of the year is no longer in sight. However, the Secretary of State for the Budget, Marta Fernandez Curras, believes that a correction is still possible in the last quarter. In all public administrations, including the Regions, the stability objective is a deficit equal to 6,3% of GDP in 2012.
But it is precisely at the local level that the Spanish situation is deteriorating. L'Andalusia could ask the Government of Madrid a emergency credit of 4,9 billion euros, as reported by a spokeswoman for the regional executive.
After Catalonia, Valencia and Murcia, the southern region would be the fourth to make an official request for aid, using the Regional Liquidity Fund, which will be activated this week. The mechanism was set up by the central executive and has a capacity of 18 billion to alleviate the financing problems of Spain's 17 autonomous communities.
Meanwhile, in addition to financial difficulties, the conservative government of Mariano Rajoy is also facing increasingly dangerous political tensions on the domestic front. The president of the Catalonia, Artur Mas, convened the early elections for November 25th neighbor "to exercise the right to self-determination".
According to reports from the El Pais newspaper, during his speech in the regional Parliament, Mas said that he had reached this conclusion for two fundamental reasons: "The pro-independence explosion of the Diada party (September 11) and the refusal of Mariano Rajoy to negotiate the fiscal pact”.
The latest polls reveal that a possible referendum on secession of Catalonia - which has a debt of 44 billion, 22% of GDP - would be approved by a very large majority of the citizens of the region. The "loyalists" would not go beyond 15/20%.
It's no better at Madrid, where 64 people were injured in the course of last night clashes between the Indignados movement and the police, near the Congress of Deputies. Thousands of people had gathered since yesterday afternoon in front of Parliament to protest against the austerity measures adopted by the government. They called for the "rescue" of the democracy "kidnapped" by the politicians. And a new constitution.
