The delinquency of the State grows to the maximum level in 20 years and suffocates SMEs: it already owes 110,000 million

Gonzalo D. VelardeFOLLOW, CONTINUEMadrid Updated: 05/26/2022 13:46h
Save
RELATED NEWS

In the midst of the recovery process of the economy, weighed down by the impact of the war on the escalation of prices and more tensions in the supply chain due to the blockade of ports in China, the Government rushed a few weeks ago to open
new financing lines for companies
and a new moratorium for those that are already subject to these publicly guaranteed loans in anticipation that the new imbalances in the economy could give the last straw to thousands of small and medium-sized companies and the self-employed, who are still dragging the economic difficulties of the pandemic .

In this way, from the Executive they understand that liquidity is a fundamental element for the survival of companies with difficulties, and even more so considering that part of the problems that companies are going through in our country are of a circumstantial nature.

The President of the Government, Pedro Sánchez, included in his shock plan against the economic impact of the war and the energy crisis the provision of an extra 10,000 million euros in guarantees from the Official Credit Institute (ICO).

Although this money has not yet been verified by Brussels for circulation, the Government recently approved the
first installment of 5,000 million
. In loans of more than 400,000 euros, 80% of new financing is guaranteed to the self-employed and SMEs and up to 70% to other companies, with a repayment term of up to 8 years.

Lead by example

However, although the Executive has rolled up its sleeves in recent months to provide this financing to SMEs and the self-employed, it does not seem to lead by example in the contracts that the different levels of Public Administrations sign with them. Far from it, the practice makes public power suffocate the most vulnerable group in the face of crisis.

Thus, the Public Administrations (central, communities and municipalities), owe a total of more than 110,000 million euros to their suppliers at the end of the first quarter, according to the PMcM according to data from the Bank of Spain relating to the last quarter of 2021 "The panorama is bleak at all levels," warns the president of the Platform, Antoni Cañete, asserting that "the breach of the obligations of public administrations is already more important than what comes from the 'Next Generation' funds" .

The figure is the highest of the entire historical series since 2003, assuming a growth of 28% compared to the previous quarter. In this calculation, in which the methodology of the Bank of Spain and the European Union is applied, reference is made to consolidated "obligations pending payment" and debts between public administrations are excluded. According to the statistics of the financial balance of non-financial entities at the end of 2021, the amount of commercial loans and advances payable amounted to 455,664 million euros.

According to the president of the Platform, the measures being taken are not enough, given a scenario that is going to worsen in the coming months, with the end of the ICO credits and the bankruptcy moratorium. Cañete highlights measures such as the Payment Plan for City Council Suppliers, which "will only reach a few", or the Create and Grow Law, which "needs changes to be effective and efficient." “Delinquency must be overcome by decisive action, such as a sanctioning regime that fines delinquent companies,” he says.

In this sense, it should be remembered that the Ministry of Economic Affairs has extended
the contract he signed with the consulting firm PwC two years ago
. In March 2020, the Executive launched 100,000 million euros in public guarantees to guarantee liquidity to companies and the self-employed during Covid. The State acts as guarantor and the bank grants the credit. Months later another 40,000 million euros in guarantees were taken out, but in this case the destination of the money was for investment.

The result so far, according to the ICO itself: «As of April 30, 2022, together the guarantee lines have deployed guarantees amounting to 105,452.50 million euros that have made it possible to mobilize 138,501.80 million euros in financing towards the productive fabric in 1,176,752 operations, of which more than 98% have been subscribed by SMEs and the self-employed.

View commentsTopics

Source link