When it comes to cash flow, the situation in Spain is complicated but not desperate. According to sources close to the Ministry of Economy, the Treasury currently counts on liquid assets of about €25bn, which is about the same amount that was available at this time a year ago.

This is enough to cover costs related to debt maturity in August and September, but not in October, when a majority of experts expect that the government of Prime Minister Mariano Rajoy will send in the final request for financial help from Europe to the Spanish banking sector.

The necessary emissions for the rest of the year add up to an amount of at least €40bn, according to UBS, although it could end up much higher if the fiscal revenues continue to fall and if the state will have to make massive financial interventions in the autonomous regions.

Major problem arrives in October

According to the Treasury, the debt maturity that Spain will have to meet adds up to €57bn between August and December. This month, the total amount is €9.8bn and in September it is €6.6bn, in both cases for short-term notes.

In October, however, the major problem of the debt maturity arrives: €9.2bn for notes and €20bn for bonds. The current reserves are not enough to cover these amounts and this forces the Treasury to place considerable emissions on the markets. 

If the public debt rates are maintained at the current levels, the government is likely to request that the European Central Bank and the European rescue fund buy sovereign bonds, as explained by Mario Draghi, president of the ECB by the beginning of this month.

A longer version of this article is available in Spanish here.