Spanish region seeks bailout

Spain's Castilla-La Mancha region will ask the central government for 848 million euros ($1.1 billion dollars) in rescue funding, the region's budget minister said on Thursday. Four other regions -- Andalucia, Catalonia, Valencia and Murcia -- have already requested aid totaling around 15 billion euros from an 18-billion-euro fund set up by the central government to help regions that are unable to refinance their debts. "Castilla-La Mancha will ask for 848 million euros from the liquidity fund. This was approved this morning during a cabinet meeting of the government of Castilla-La Mancha," regional budget minister Arturo Romani told reporters. The region, whose windswept plateau and windmills are symbols of Spain, had a total debt of 6.8 billion euros at the end of June, the equivalent of around 20 percent of its economic output. Spain's central government said Tuesday that the liquidity fund would be activated this week. It argues the amount of money in the fund will be enough to cover the region's needs. Many of Spain's 17 regions, responsible for half of all state expenditure, are smarting under central government deficit-cutting demands, which are forcing them into health and education cuts. Catalonia wants 5.0 billion euros from the liquidity fund, Valencia is seeking 4.5 billion euros and Andalucia, Spain's most populous region, wants 4.9 billion euros. Murcia is seeking around 300 million euros from the fund. The regional governments have promised to cut the deficit -- the gap between income and spending -- to 1.5 percent of total economic output by the end of this year. They posted an average deficit of 0.77 percent of output in the first half of the year. Investors have been banking on Spain seeking a full-blown bailout soon, pressured by high borrowing costs and looming debt repayments including about 30 billion euros in October. Spain is battling to narrow the public deficit from a blowout figure of 8.9 percent of output last year to 6.3 percent in 2012, 4.5 percent in 2013 and 2.8 percent in 2014.