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Spain's Valencia region seeks financial aid

MADRID (MarketWatch) -- The government of the Spanish region of Valencia said Friday it will apply for financial aid from a newly created government fund, as it struggles to refinance maturing debts.

"Valencia, like other regions, is suffering the consequences of liquidity restrictions in markets which are a result of the economic crisis," the region said in a statement.

The central government launched the fund last week, and said it would lend out a maximum of 18 billion euros ($22 billion) to regions before the end of the year.

In exchange for receiving the emergency funding, regions will have to reduce their budget deficits by more than they had earlier planned.

See also: Spain, Italy stocks tumble as bond yields rise