CATALONIA HAS announced it will not be able to pay thousands of health- and social-sector workers for the month of July, highlighting the pressure many Spanish regions are under as the country struggles through the economic crisis.
Hospitals, mental-health centres, nursing homes and clinics for people with disabilities that rely on a mixture of public and private money will bear the brunt of the one-month funding cut-off.
The Catalan regional administration blames the central government for the lack of funds but says payments in August will be made as normal, with the arrears included.
An association representing the sectors affected warned that many health and social organisations faced imminent “collapse” due to the regional administration’s decision. The authorities did not put a figure on how much money was being held back, but El País newspaper estimated that it was about €400 million, with up to 100,000 workers not receiving their wages for the month.
This is not the first time Catalonia, in northeast Spain, has taken such a step. In September 2011 it withheld some funds from the health and social sectors until the end of the year. In recent months the region has implemented spending cuts in the health sector as it tries to slash its budget deficit, sparking street protests.
Last week Catalonia said it would require help from a new state fund to meet its financing needs, following the lead of Valencia, on the east coast, and Murcia, in the southeast. Other heavily indebted regions are expected to take the same route, although Catalonia is the biggest worry. With an economy the size of Portugal’s, it has debts worth €42 billion.
Spain’s 17 regions are responsible for 40 per cent of the country’s spending. Their difficulties have created a new problem for the central government and have kept the country at the heart of the euro zone debt crisis.
Tensions between Madrid and Catalonia were apparent yesterday as the northeastern region’s economic head, Andreu Mas-Colell, boycotted a meeting between regional representatives and Spanish prime minister Mariano Rajoy aimed at reaching an agreement on spending limits.
“All the decisions have already been taken, unilaterally and without the possibility of dialogue,” said a spokesman for the Catalan government, which wants more spending leeway.
Andalusia’s representative at the meeting walked out after an hour, deeming the central government’s demands excessive.
