Madrid may intervene in regions Spain's central government may take over the finances of wayward regions as early as next month if they fail to adhere to strict budget deficit limits, senior officials in Madrid said on Monday. International investors concerned about overspending by some of Spain's 17 autonomous regions, and by the need to recapitalise banks, have been selling sovereign bonds, forcing down prices and pushing yields up towards unsustainable levels. The yield on Spanish 10-year bonds rose at one stage to 6.14 per cent on Monday from 5.65 per cent at the end of last week. Asked if the central government would intervene in the regions, one official said: "Yes, clearly, if things are not done, if there's no viability plan in place - because they cannot finance themselves on their own." Another said: "We are inclined to do it the same day we get data showing that an autonomous region won't fulfil its obligations." Spain's total public sector deficit barely declined last year and amounted to some €90bn, or 8.5 per cent, of gross domestic product - far above the 6 per cent target agreed by the former Socialist government with the European Union. Most of the overshoot came from the regions, which manage schools and hospitals and account for just over half of all public spending. Mariano Rajoy, the centre-right prime minister elected in November, has agreed with the EU to cut the deficit by more than 3 percentage points this year to 5.3 per cent of GDP. Of that, the regions are collectively allowed to contribute only 1.5 per cent of GDP, which means they will have to halve their deficits from 2011. Although Spain is one of the most decentralised nations in western Europe, Mr Rajoy's ministers say they have the power under new and existing legislation to force autonomous regions into line, not least because they cannot raise money to fund their deficits without central government permission. One possible candidate for intervention is Andalucía in the south, Spain's most populous region, which has publicly criticised Mr Rajoy's austerity measures. In a regional election last month, Mr Rajoy's Popular party had hoped to oust the leftwingers who have run Andalucía for the past 30 years, but the PP did not win enough votes and the left remains in control. Andalucía, however, is not alone in failing to obey fiscal rules. All the major political parties, including the PP, have exceeded deficit targets in the regions they administer. "Our commitment is to economic stability and reforms at all levels of the administration," Mr Rajoy said in a Madrid on Monday at a meeting of family businesses.