Spain Regions, Town Halls to Get Extra Aid for Unpaid Bills

The Spanish government is planning a second bailout of regional administrations and town halls, lending them as much as 7 billion euros ($8.8 billion) to pay suppliers that were excluded from an initial loan program.

The amount will be taken out of the 35 billion-euro envelop initially set by the government to clear unpaid bills to public suppliers, said an official for the Ministry of Regional and Local Administrations who asked not to be named. It will cover companies that provide goods and services to private companies or public entities that have a contract with regions or municipalities, he said.

The regions have already borrowed 17.7 billion euros from the facility and the town halls 9.3 billion euros to pay direct suppliers. The debt is guaranteed with the tax-receipt transfers they receive from the central government. A guarantee system for indirect suppliers will be presented in July, the spokesman said.

To contact the reporter on this story: Angeline Benoit in Madrid at abenoit4@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net

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