Several Spanish regions are rebelling against the central government’s decision to cap their debt, raising fresh doubts over its ability to meet deficit targets agreed with Brussels.

Regional finance chiefs at a meeting with the national treasury have agreed to an overall debt ceiling for the 17 regions of 15.1 per cent of output in 2012 and 16 per cent in 2013.

But four regions, including two of the largest, Catalonia and Andalucia, refused to accept the central government’s clampdown on their finances.

Catalonia, Spain’s richest region with an economy equal in size to Portugal’s, boycotted the meeting altogether while the finance chief of Andalucia, the country’s most populous, walked out of the gathering.

Two smaller regions, Asturias and the Canary Islands, voted against the targets at the meeting.

“The lack of internal cohesion is highly damaging to the international credibility of Spain at a key moment for its economy and that of the Euro Zone,” Barcelona-based daily La Vanguardia wrote in an editorial today.

Spain has slashed spending and raised taxes as it seeks to convince markets that it will not need a full bailout, on top of a €100 billion ($123 billion) credit line from the EU agreed in June for its stricken banks.

The regional governments, which fund education and healthcare, are crucial to Prime Minister Mariano Rajoy’s effort to bring the country’s overall public deficit down to just below a EU limit of 3.0 per cent of output by 2014.

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