Brussels, 01/08/2012 (Agence Europe) - The Catalonia region of Spain is facing cash-flow problems. The government of the autonomous region announced on Monday 30 July 2012 that it will not be paying the usual subsidies in July to hospitals, old people's homes and similar organisations. The news comes a week after Catalonia announced that it is looking into requesting a bailout (see EUROPE 10662).
Hospitals, school, old people's homes and children's centres are unhappy about having to do without the subsidies they usually receive from the Catalan government, which does not have enough cash in its coffers to make the July payments, as explained a spokesperson for the Catalan Ministry of Economics. Spanish newspaper El Pais says things are expected to return to normal in August, but the government is not promising to pay the July subsidies in arrears. The Catalan government has not indicated the total subsidies that will not be paid in July, but El Pais says that subsidies to hospitals alone cost €345 million. Trade unions suggest that some 100,000 workers in Catalonia risk having their pay cut in July. Catalonia's cash flow problems suggest that the region will have to call upon the €18 billion regional bailout fund recently set up by the central government in Madrid. (MD/transl.fl)