ABSTRACT
The fact that the regions could spend their loans on capital projects of their own choosing meant that debt was a source of independent finance with fewer political difficulties than raising taxes. The net result of this situation is clear from Figure 9.6. In the years immediately following the granting of autonomy, regional debt increased at a staggering rate, although there were significant regional variations, as shown in Figure 9.7. Cantabria in particular pursued a policy of prestige investment which came at a high price. By 1992, it was persuaded to start paying back its debt, which explains its negative borrowing figure for the 1992 budget.
