Regions in Spain oppose gap targets

MADRID - The Associated Press

Spanish Treasury Minister Cristobal Montoro (C) is seen at a press meeting. EPA photo

A growing number of Spain’s heavily indebted regions are rebelling against government orders to slash their deficits and could upset efforts to convince the European Union and investors that the country can manage its finances and will not need an international financial bailout.

A majority of the 17 regions agreed at a meeting to slash their deficits to 0.7 percent of GDP in 2013, but the powerful northeastern region of Catalonia boycotted the session while the chief financial officer for the southern Andalusia abandoned the meeting on July 31 in protest.

Two other regions, Asturias and the Canary Islands, voted against the proposal.

Curbing Spain’s deficit is seen as key to bringing down Spain’s borrowing costs.

The interest rate for Spain’s benchmark 10-year bond remained perilously high Wednesday at 6.6 percent.