Catalonia unable to fund its social services

Catalonia has indicated it will join Valencia and Murcia in asking the government for loans from a regional bailout fund

The Catalan government on Tuesday said it is unable to pay this month’s bills for privately managed hospitals, old people’s homes and disabled centres, blaming Spain’s central government for its financial problems.

“Liquidity for these payments depends on them,” said Francesc Homs, spokesman for the Barcelona-based government. “They should meet their obligations, and they are not doing so.”

Regional governments provide health, education and social services and jointly account for almost 40% of Spain’s public spending. Catalonia, one of Spain’s wealthier regions, has outsourced management of almost half of its hospital services and much of its care for the disabled and elderly. Several old people’s homes were reported to have lodged a court writ demanding immediate payment.

Late payment of July’s bills will also apply to some 700 privately managed, but state-funded, schools – though teachers salaries are not affected.

The Catalan administration boycotted a meeting between the Spanish government and regional finance chiefs.

At the meeting budget minister Cristóbal Montoro was expected to try to force regional finance chiefs to stick to a joint deficit target of 1.5% this year. “It doesn’t make sense to attend a meeting where everything is already decided,” said Homs.

Catalonia has indicated it will join Valencia and Murcia in asking the government for money from a new regional bailout fund for financing deficits and refinancing existing debt.

Regional leaders were waiting to hear exactly what conditions the government would attach to loans from the fund – which will probably include more austerity and a tighter rein from Madrid.

Pictured: Calella de Palafrugell, Costa Brava, Catalonia, the Spanish region has run out of money to pay for social services. Photograph Alamy