The Balearic Government accumulated debts to the tune of 5,225 million euros with the Government of Pedro Sánchez by the end of last year.
The Balearics are at the tail end when it comes to receiving resources from the State which means the Government has to borrow money to meet the needs of the Islands. The Central Government skimps on financing then lends money to the Balearic Government so that it can complete its income, but there’s one essential difference: the 5,225 million euros that came from financing is a loan which equates to 58% of the total amount owed by the Community.
The Government estimates that it will end up with a debt record of 9,035 million euros as of December 31, 2020. The debt contracted with the Government through different financing mechanisms has been reduced since it approached to 7,000 million, representing 74% of global debt.
The Balearic Government has asked to be able to borrow a maximum of 1,551 million euros for the current year, which will basically be used to pay off previous debts, in addition to the 1.1% deficit that will be generated this year.
It also hopes it won’t exhaust the 1,551 million euro maximum limit, which will be requested from the State through the liquidity mechanisms for the Autonomous Communities.
Meanwhile, the Balearic Government continues negotiating in the hope that the Central Government will approve a reduction on the 5,225 million it owes.
The Comptes Syndicate report estimates that under-financing of the Islands has caused 3,360 million euros worth of debt and that is the amount that the Balearic Government won’t have to pay if the removal is approved, but Finance Minister, María Jesús Montero is radically opposed to that possibility.
The coronavirus pandemic has left many Government negotiations unresolved and the President of the Balearic Government, Francina Armengol is hoping that this issue and others will be addressed when things get back to normal.