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€100,000M bailout as Mallorca pays 20% of budget to banks
Majorca pays nearly five times budgeted loan repayments
The German Chancellor, Angela Merkel,said yesterday that she was confident that Germany will pass the bill to provide financial support to Spain's troubled banking sector. This news comes to Palma as Majorca and the other Balearic Isles are looking to spend five times the budgeted amount paying back loans to the struggling banks.
This year the Balearic Government will pay back a total of 779 million Euros in loan repayments and interest instead of the 171 million Euros set aside in the budget for that purpose. This year's budget has been set at 3.324 million Euros meaning that the Mallorca will have to spend nearly one in every five Euros of the budget on loan repayments.
The loans coming to Spanish banks from the Euro zone total up to 100,000 million Euros and aim to rescue the banks which were left in trouble after the collapse of the housing bubble. Germany needs to agree to the deal before the finance minister can begin meetings with his Euro zone counterparts.
