Catalonia taps Spanish liquidity fund – official

Catalonia, among the biggest of Spain’s 17 regions, is to tap the country’s central government for €5bn in liquidity, as it also looks to further cut public deficit spending.

The deal confirms the trouble Catalonia and other regions are in, as Spain struggles to balance its books amidst an ongoing bank funding crisis. One estimate puts Catalonia’s debt alone at over €40bn, with investors demanding ever higher yields in order to offer refinancing.

Spain has already negotiated a €100bn rescue package for its banking sector. The country’s prime minister Mariano Rajoy is scheduled to meet French president Francois Hollande on Thursday this week, and German chancellor Angela Merkel subsequently on 6 September.

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