The regional government will need to borrow a further 1,071 million euros next year in order to balance the books. Agreement has been reached for a total spend of 4,668 million euros, the highest ever, of which 828 million will go on paying debts to the national ministry of finance and to banks. The government will in effect, therefore, be borrowing in order to pay debts.
Project investment will, as already reported, go up by almost 14% to 171 million euros and will be targeted mainly at the health and education sectors as well as the environment. The health ministry will receive the largest amount. The 1,472 million euros allocated to it will represent an increase of 7.6%. The budgets for education and social services will both also increase to, respectively, 882 million and 174 million euros. A further rise will be on personnel, which will go up by almost 8% to 1,356 million.There is to be a contingency fund of 38.4 million for any unexpected payments, such as compensation demanded by court judgements.
Finance minister Catalina Cladera, presenting the budget, noted that there have been great difficulties in its preparation because national government had only recently notified Palma what can be expected by means of payments on account. These will rise by 7.4% to 1,621 million euros to which 686 million can be added as settlement for 2014.
Cladera said the amount was clearly insufficient, which is why the Balearic debt is so high and the level of borrowing will go over the 1,000 million mark. She added that she will be seeking a meeting with the new finance minister next week in order to discuss the financial situation in the Balearics. One way of improving the situation would be for Madrid to write off the debt owed to it. Of the 882 million being repaid next year, 500 million will go to the national government.