World Bulletin / News Desk
Spain's central government said on Thursday it would soon back the debt repayments of the country's 17 regions and start proceedings this month to take over the finances of a group of regional budget sinners.
After meeting regional heads of finance, Treasury Minister Cristobal Montoro also said the deficit path for the autonomous communities would be relaxed in 2013.
It will however be tightened in 2014 and remain unchanged this year. The European Union has given Spain until 2014 to get its finances in line with EU rules.
"The fund will address specific debt repayments of autonomous regions which can't address them by themselves on an exceptional basis and the regions which use the fund will have to meet new conditions to clean up (their deficit)," Montoro said at a news conference in Madrid.
"It will have the state guarantee," he added, although he refused to give any additional detail before the mechanism is discussed and agreed on Friday at a weekly cabinet meeting.
The big debts of the regions and ailing banks - which will receive a lifeline of up to 100 billion euros from the EU - have pushed Spain closer to seeking a bailout for the state.
The regions are currently shut out of international financial markets and have long asked the state to help them meet 15 billion euros of debt repayments by year-end and ease their liquidity situation.
The central government had however until now delayed creating such a the mechanism because it feared it could affect its own rating, which is already on the verge of junk territory.
Montoro said the state lifeline would not be a free lunch for the regions which need it.
They will have to announce further deficit-cutting measures, strictly comply with their targets and fall under increased scrutiny from the central government.
A group of regions, whose current budget plans will not enable them to meet their deficit objectives, could even see their finances being taken over by the state if they repeatedly fail to adopt corrective measures.
Montoro declined to say how many regions would have to review their plans but sources in the regional governments said eight may be affected.
"There is a process of seven days. During these seven days we will analyse how close they are to meeting their objectives ... and in the case that we can't find an agreement the ministry would send them a warning," Montoro said.
The ministry set a new deficit objective of 0.7 percent of gross domestic product for the regions in 2013 from 0.5 percent previously. It however kept unchanged the target of 1.5 percent for this year and tightened it to 0.1 percent in 2014 from 0.3 percent earlier.
OPEC's influence is waning as it fails to cut production Thursday amid falling oil prices, while divisions between its member states deepen, experts say.
A controversy surfaced recently after the Public Account Committee (PAC) released a report accusing senior government officials of having fraudulently authorized payment of at least $122 million of public funds to a private company
Venezuelan Foreign Minister Rafael Ramirez left the meeting visibly angry and declined to comment on the outcome.
A number of potential deals under discussion in recent months could benefit from concessional financing from Tokyo.
The WTO has lurched from one disappointment to another over the past decade as it tries to find a balanced trade deal that all its members, now numbering 160, could support.
Saudi Oil Minister Ali al-Naimi said he expected the oil market "to stabilise itself eventually" but did not comment on talks with Russia held on Tuesday
Ergun Olgun, the Turkish Cypriot negotiator, said their own exploration would continue and even accelerate if Greek Cypriots pressed ahead with their plans to allow multinationals to exploit the area.
The decision to devalue the naira, according to analysts and central bank figures, appears aimed at saving the country's dwindling foreign reserves
Oil market watchers are divided on the outcome of OPEC's meeting in the Austrian capital. Predictions range from a large production cut to revive prices, to a small reduction, or none at all
The proliferation of smugglers' routes into Bolivia shows how difficult it is to eradicate illegal mining without better coordination across frontiers.
Falling crude prices are fueled by slowing global growth and increased supply.
Ukraine's leading banks said most of their loans to Crimean individuals and businesses were now delinquent.
Deputy Energy Minister Jaime Himende said that "Mozambique has great hydroelectricity potential, and recently they have taken some bold steps to use renewable resources efficiently"
Obama, who hosted Modi in Washington in September, will in January become the first U.S. president to visit India twice, completing a remarkable warming in the relationship
The combined damage inflicted on Russia's economy by Western sanctions and falling oil prices totals about $140 billion.
PM Mahlab said that Egypt eyes sustainable growth to improve the living conditions of Egyptians, noting that the Egyptian economy is currently recovering.