The Ministry of Finance and Public Administration received last Thursday “surprisingly” a communication from the Ministry of Finance and Public Service in which “the rules of the game of access to extraordinary liquidity mechanisms change,” such as the Fund of Autonomic Liquidity (FLA) or the Financial Facility Fund, so that, according to the executive of Mariano Rajoy, from now on “there will be no zero-rate loans for the autonomous communities that have met the deficit target”.
According to the Ministry in a note, this means that Andalusia, “despite having met in 2016 with the target set at 0.7 percent (closed the year with 0.65 percent), you can not benefit from the zero-rate financing to which up to now the compliant communities were welcomed “. This will mean an additional expense for Andalusia over the next three years of 131 million euros, motivated by “this discretionary and surprising change of the Government of Spain.”
Thus, he regrets that the central government “now penalizes the autonomous communities complying with the deficit,” noting that Andalusia “will stop receiving 131 million euros that would have corresponded to meet the target marked now penalties to the autonomous communities compliant with the deficit. “
The Board recalled that, with the economic crisis and the difficulty of access to markets,
the Ministry of Finance launched the Autonomous Liquidity Fund (FLA) in which the State became the provider of loans to communities autonomous at interest rates that varied according to the market. Since 2012, these rates have ranged from five to 0.8 percent more recent.
In 2015, to encourage the autonomous communities to meet the deficit target, a new compartment was opened in the FLA, the so-called Financial Facility Fund, “which was nothing more than a zero-rate FLA, and of which some communities, among them Andalusia, they benefited “.
The Andalusian Government regrets that, nevertheless, the new announcement of the Ministry of Finance “eliminates the differences between communities that comply with and do not comply with the deficit and, from now on, the Government will charge the loans to the communities at an interest rate that It’s about one percent”- Okokrolex.
NO INCENTIVES TO COMPLY WITH THE DEFICIT
The Ministry headed by María Jesús Montero has expressed its displeasure to the Executive, since Andalusia, as a community with the objective of the deficit, “expected to be able to benefit from the Financial Facility at zero rates”.
In his opinion, “this supposes an additional tension to the autonomic accounts of the next exercises and eliminates one of the few incentives that existed to fulfill the objective of the deficit”.
For the Ministry of Finance and Public Administration “this new change has not been explained or argued”, so, in his opinion, can only be due to two reasons. The first, “that the central government wants to save the money to finance at zero rates, because in 2016 many communities had met the deficit target”.
Secondly, he believes that it can be due to “the new political landscape, where many autonomous communities have changed the political color, which makes the Popular Party Government not have priority in them, beyond the specific support to ensure their stability in the Congress of Deputies “.
This last change of the rules of the game in such a transcendent subject for the fundamental public services as the financing of the autonomous communities, “seems to advance the insensitive attitude of the central Government before a matter of so much draft and urgency, as the reform of the system of regional financing for which Andalusia has stopped receiving 4,672 million euros “.
The decision to cancel zero-rate financing for communities that met the deficit target continues on the path of “suffocating communities and municipalities, to which the Government is insensitive despite the sacrifices made.” The Board points out that “all this, despite the fact that the central government failed to meet its deficit target in 2016, and that the overall deficit target of the Kingdom of Spain vis-à-vis Brussels was met by the surplus of municipalities and the fiscal discipline of the autonomous communities “