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Prime minister holds secret meeting over regional finances

Rajoy and Basque premier discussed possible relaxation of deficit target

Prime Minister Mariano Rajoy and Basque premier Iñigo Urkullu secretly met in Madrid last Wednesday to discuss regional financing issues, the newspaper Abc reported and sources in the Basque government and the ruling party have confirmed.

This is the second time that Rajoy has privately met with a regional leader following his March 21 tête-à-tête with Catalan premier Artur Mas.

This latest meeting focused on the “Cupo,” or the amount of money the Basque Country pays the state for services that have not been devolved to the regional government, and on the possibility of relaxing the regional deficit target, which is set at 0.7 percent for this year.

Urkullu’s Basque Nationalist Party has made it clear that it would like to maintain the same target as last year (1.5 percent), to alleviate the region’s financial struggles. Last month’s meeting with the Catalan nationalists broached the same subject, and Mas walked away with the promise of a higher deficit target to pull Catalonia out of financial lockdown.

Basque leaders estimate the state owes them around 800 million euros in connection with the Cupo, and Urkullu is keen to have something to show the Basque parliament when he walks in on April 26 to debate the budget.