Catalonia to tap 5 billion euro of Spanish state funds

MADRID (Reuters) - Catalonia, which generates around a fifth of Spain's economic output, will tap a state liquidity line for just over 5 billion euros ($6.26 billion), a spokesman for the north-eastern region's government said Tuesday.

The facility will cover financing costs linked to plans to cut its public deficit to 1.5 percent of gross domestic product this year, as well as maturing debt costs, the spokesman said.

The region would not accept political conditions for the aid, he added.

Of Spain's 17 regions, Valencia and Murcia have also said they would need to tap the fund.

The government said in July it was setting up a mechanism to help the regions repay their debts, using funds from the state lottery and bank loans. But the facility is still not up and running.

In all, some six regions are expected to need central government help to meet deficit targets and pay service providers.

Catalonia has called over the past year for the introduction of some form of mutualization of debt for Spain's regions to help bring down its financing costs.

Catalonia, which is heavily indebted, insists its fiscal position would be better if it were able to create its own tax agency, which it hopes to establish in the future.

($1 = 0.7990 euros)

(Additional reporting by Blanca Rodriguez; Editing by Fiona Ortiz, John Stonestreet)

Source: http://news.yahoo.com/spains-catalonia-says-tap-state-liquidity-line-120556025--business.html

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