Spain’s Catalonia region needs to restructure its finances to reduce its debt burden, the lead candidate of the largest anti-separatist party in next month’s elections said.
The Catalan government of Artur Mas has scope to cut 1 billion euros ($1.1 billion) of spending linked to its plan to split from Spain, Ines Arrimadas of Ciudadanos said in an interview in Barcelona Friday. She also called for the elimination of county-level administrations to save money.
Mas plans to use the results of the Sept. 27 Catalan elections as a de-facto referendum on independence. Spain’s largest regional economy is set to post a budget deficit of about 2 percent of economic output this year, more than double the 0.7 percent target set by the central government, according to estimates last month by the national budget watchdog.
“What the Catalan government needs is a restructuring of all its finances,” Arrimadas said. “The Catalan government’s finances are broken.”
Investors demand an extra 247 basis points to hold Catalan bonds due 2020 instead of similar-duration debt issued by the Spanish treasury, according to data compiled by Bloomberg. That’s more than double the 120 basis-point gap on March 25, the lowest this year.
Catalonia is the largest user of the rescue facilities set up by the Spanish government after several regions lost access to the financial markets during the credit crisis. The region’s finances are out of balance because the central government doesn’t transfer enough cash to finance all services, Francesc Homs, the head of Catalonia’s presidency department, said in an interview Wednesday.
Ciudadanos has enough support to win 27 of the 135 seats in the Catalan parliament, according to a NC Report poll released Thursday by La Razon newspaper. That would make it the second-largest group in the legislature after a pro-secession platform backed by parties including Mas’s Convergencia, which has sufficient backing to win 56 seats.