France*s Hollande Pushes For EU Action

CIARAN GILES

MADRID (AP) ⿿ French President Francois Hollande called on Europe's leaders to make serious headway in introducing measures to ease the pressure on countries such as Spain.

Speaking at a press conference following talks in Madrid Thursday with Spanish Prime Minister Mariano Rajoy, Hollande urged politicians to use the next European Union summit on Oct 19. "to make decisions concerning the eurozone, lasting decisions."

"We've been putting off choices for too long, and we've let doubt take hold."

Hollande was referring to delays in introducing measures agreed at a summit in June to grant countries easier access to bailout money and set up a single banking regulator that could take the burden of bank bailouts off national governments.

The French leader's remarks came as the financial problems of Spain's regional governments put the country under even greater pressure to ask for a bailout.

Spain is in a double-dip recession with near 25 percent unemployment following the bursting of a real estate bubble in 2008. It is under fierce pressure to reduce its swollen deficit, cut central and regional government spending and clean up a banking system laden down with toxic property assets.

On Thursday, the Valencia regional government said it would have to tap a central government rescue fund for ⿬4.5 billion ($5.6 billion) ⿿ a billion more than previously planned ⿿ to help it handle its debt. That brings to almost ⿬11 billion the amount being sought by just three regions from the ⿬18 billion fund set up last month.

The northeastern region of Catalonia is to seek ⿬5.02 billion while southern Murcia intends asking for at least ⿬300 million. Four other regions are also expected to tap the fund.

Many of Spain's 17 semi-autonomous regions, which can set their own budgets and spending plans, are struggling in the country's recession. Some of the regions, which take up almost 40 percent of public money, have overspent and are unable to borrow on financial markets to repay their huge debts.

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