The Generalitat is launching a bond issue on October 24th, in the hope of raising between three and four billion euros (read article in Castilian here, El Periódico). While the initial bond issue will be worth €3 billion, the Catalan government has the opportunity to expand it by another €1 billion, if it wishes. One-year bonds will pay interest of 4.75 percent and two-year bonds, 5.25 percent. The payment for the bonds will be due on 21st Novmber, following the closure of the offer on the 14th, which is the same day that the Generalitat has to pay back the €3 billion plus €142.5 million in interest, on one-year bonds taken out by investors last year, which also offered 4.75 percent interest. The aim of the new offer is to encourage existing one-year bond-holders to renew their holdings (what is called in financial jargon, 'passing the ball'). Banks involved with the bond issue, including La Caixa, Catalunya Caixa and Banc Sabadell, have detected a high level of interest in such a move amongst existing one-year bond-holders "thanks to the rate of interest" on offer, according to sources from these companies. The average commission these financial entities will make on these transactions is two percent, with the highest being 2.20 percent.
The Catalan government is contemplating the non-payment of the additional Christmas payment to civil servants in the region (read article in Catalan here, El Punt-Avui). The conseller for economy, Andreu Mas-Colell, revealed yesterday that the Generalitat hadn't discounted the possibility of applying such a saving measure to public workers. "Unfortunately, nothing is sacred," he commented. The government believes that the public employment system is too big compared to income and, taking into account its current deficit, cuts in spending are necessary. With this and other, unknown proposals thought to be on the table, the head of economy also confirmed that he won't present the 2012 budget on Monday as had been established in a resolution approved by the opposition in the last debate of general policy in the Catalan parliament. He said that it was literally "impossible" to do.
While the price of public transport in Barcelona is set by the Autoritat de Transport Metropolità, yesterday the Área Metropolitana de Barcelona (AMB), made up of councils from the metropolitan area of the city, put forward the possibility of a rise in the cost of travelling here, following the same suggestion raised last week by Barcelona mayor Xavier Trias (read article in Castilian here, La Vanguardia).The move seems obvious to Trias, given the increase in the cost of electricity and fuel. "Maintaining the service next year will be five percent more expensive," said the vice-president of transportation for the AMB and mayor of Sant Joan Despí, Antoni Poveda. He said this yesterday in the presentation, together with Joaquim Form, president of TMB (the main public transport operator) of the figures of metro and bus users in Barcelona and the metropolitan area during the first eight months of this year. In total, there were 430.7 million passengers, an increase of 1.6 percent compared to 2010, although the number of bus passengers actually went down. Public transport, according to the management of AMB, "is necessary in times of crisis"; however, the price increase in 2012 now seems inevitable. It is hoped that the rise will be moderate, as was also suggested by Trias, who hoped for a price rise below inflation, although he said it was necessary to review all the figures. For the rise to be small, a greater financial contribution by both the Generalitat and the state would be necessary. "It's still early, we have to see how the contributions from the different administrations look like, but we have to be sensitive to the situation that the country is living through," said Poveda. "Sixty percent of the cost of tickets is subsidised and there has already been a significant rise in the indebtedness ofTMB, and everything has its limit. All of this has to be dealt with and that has to be taken into account when making a decision," warned Forn.