Thu. Mar 21st, 2019

The Generalitat will borrow 8,071 million this year from the Facility Fund

La Generalitat pedirá prestados este año 8.071 millones al Fondo de Facilidad

The Generalitat plans to borrow a total of 8,071 million euros this year from the Financial Facility Fund (FFF). This is how he has assured Efe the Minister of Economy and Vice-President of the Government, Pere Aragonès, who has specified that of that amount a total of 7,703 million correspond to maturities, 125 million to negative settlements and 243 million are requested to cover the authorized deficit limit for 2019, which is 0.1% of the Catalan GDP.

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The Generalitat wanted to have a more flexible deficit limit of 0.3%, but the PP veto on this deficit path has left the authorized limit at 0.1% of GDP.

When leaving the Autonomic Liquidity Fund (FLA) and go to finance from January through the Financial Facility Fund, the state control over the finances of the Generalitat will be more lax.

Aragonès wanted to have a more flexible deficit limit, 0.3%, but the PP veto on that deficit path has left the authorized limit at 0.1% of GDP

"As the objective of debt and deficit has been met, and with the average period of payment to suppliers, the stricter control measures disappear", Aragonès assured, adding that the Generalitat will no longer have the obligation to present a adjustment plan to the Treasury.

Although Aragonès has specified that the FFF is also a fund that depends on the State, "it is the previous step that the communities that have already begun to issue (debt) in the markets have followed," such as Madrid or Andalusia. "In fact, Andalusia is financed in part through the Financial Facility Fund and partly through debt issuances," said the Minister of Economy.

"It is important for the Generalitat to follow this path, because we want to re-finance ourselves in the markets and not go to the State administration," Aragonès remarked, saying that former Minister Cristóbal Montoro used the FLA in recent years "as an instrument of political recentralization ".

The FFF, the previous step to be financed in the markets and issue debt

To the question of whether the Generalitat could be re-financed in the financial markets in 2020, he pointed out that it will be "as soon as possible and when the conditions are met", and added that "there is interest" for the Generalitat's debt, although Catalonia must re-issue when the "appropriate conditions" are given, he insisted.

73.2% of the debt of the Generalitat, whose liabilities total 78.506 million euros, is already in the hands of the State, according to data from the Bank of Spain consulted by Efe.

As of September 2018, the latest data available, the State had a total of 57,513 million euros of debt of the Generalitat.

To the question of whether this year should begin to negotiate with the State a restructuring of the debt of the Generalitat, Aragonès has commented that this issue "is not on the table" of the Ministry of Finance.

"This negotiation we understand that should be preceded by the recognition of an existing underfunding that has led some communities are those who have had to borrow more because they have incurred major deficits," Aragonès noted, for whom "the need to go to the FLA it is a consequence of underfunding. "

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