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STAFF REPORTER PALMA/MADRID

AT the end of the second quarter this year, the Balearic debt stood at 3'822 million euros, 7.7 percent higher than the first quarter figure, and the third highest in the country in relation to its Gross Product, the Bank of Spain reported yesterday.

The Bank confirmed that after Valencia and Catalonia, the Balearics is the most indebted region in relation to its Gross Product (PIB) with debt having increased in the second quarter by 14.5 percent.

The report, published yesterday confirmed that the Balearic debt grew during the second quarter of the year by 24.4 percent in comparison with the same period in 2009. Nevertheless, said the Bank of Spain, the rate of increase of indebtedness in the Balearics - both in terms of year-on-year figures and those showing growth or decline from one quarter to the next - are below the national average.

Across Spain as a whole, regional debt grew by 10 percent in the second quarter compared to figures for the January to March period, to reach 104'083 million euros. The debts of local authorities rose by 14.8 percent in the same period and now stand at 36'413 million euros.

Regional debt only dropped in the second quarter of the year in the Canary Islands - by 2.5 percent - whilst everywhere else it went up, particularly in Asturias (21.5%) and in the Basque Country (18.3%).

Compared to the second quarter in 2009, regional debt rose between April and June this year by 26.5 percent. There were no parts of the country where year-on-year quarterly debt did not increase, but growth was particularly noticeable in the Basque Country (186.9%), the Canary Islands (55%), Navarre (51.1%) and Murcia (50.2%). Debt increased to a lesser extent during this period in Madrid /7.4%), La Rioja (11.1%) and Valencia (16.3%).

In its report, the Bank of Spain also provided information on the relation between the debt of each region with its Gross Product (PIB). The highest was registered in the second quarter of this year by Valencia whose debt rose by 16 percent of its PIB, compared to the national average growth of 9.8 percent.

Following Valencia were Catalonia with its debt having increased by 14.7 percent of its Gross Product and the Balearics (14.5%). At the other end of the scale in this analysis were Cantabria where second quarter debt growth in relation to PIB was just 5 percent, Asturias (5.7%) and the Basque Country and Castilla-y-Leon both registering around 6 percent.

Madrid, owing 7'145 million euros is the most indebted regional capital, followed by Valencia (862 million), Barcelona (794), Zaragoza (760), Malaga (712), and Sevilla (519).