Local debt is the big untold story of the Euro crisis and, if that was not apparent before, it became glaringly so when Catalonia’s President this week told the world his autonomous Catalan Government would struggle to meet its bills at the end of this month.
What I take issue with is that he didn't actually fact check whether or not Catalonia is an example of a dangerously indebted region. He makes it sound as if Catalonia is on the brink of default by the end of the month, which isn't the case at all. He just takes the words of a politician at face value, apparently unaware of the internal dynamics of Spanish politics.
What the Catalonian president did was to pressure the Spanish government to let the regions refinance in federal Spanish bonds because interest rates are lower than for debt issued by the regions.
Local debt is the big untold story of the Euro crisis and, if that was not apparent before, it became glaringly so when Catalonia’s President this week told the world his autonomous Catalan Government would struggle to meet its bills at the end of this month.
What I take issue with is that he didn't actually fact check whether or not Catalonia is an example of a dangerously indebted region. He makes it sound as if Catalonia is on the brink of default by the end of the month, which isn't the case at all. He just takes the words of a politician at face value, apparently unaware of the internal dynamics of Spanish politics.
What the Catalonian president did was to pressure the Spanish government to let the regions refinance in federal Spanish bonds because interest rates are lower than for debt issued by the regions.