September 26, 2020

The municipalities approve the Treasury proposal to use their surplus only with the vote of the PSOE


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The Federation of Municipalities and Provinces (FEMP) approved this Monday the Treasury document that allows municipalities to use the surplus and has achieved it with the only vote in favor of the PSOE that it has caused a tie, broken by the casting vote of the president, the socialist Abel Caballero.

The Treasury proposal has not aroused consensus as usual in the FEMP agreements. The Governing Board has achieved a tie: 12 socialist votes in favor and 12 against (10 from the PP, one from Cs and another from the PdeCat); the abstention of IU-Podemos and the tie generated has allowed recourse to the regulation and the president and socialist councilor has tipped the scales towards the agreement.

In the internal regulations of the FEMP in its article 29 it indicates that in voting with the result of a tie the casting vote of the president decides.

According to negotiating sources, the fact that the agreement does not provide sufficient attention to municipalities without remnants has led PP, Cs and PdeCat to vote against it, while IU-Podemos has opted for abstention on the understanding that improvements had been made to the text and they hoped to continue making progress in the parliamentary process.

The agreement has come after weeks of negotiations between the Treasury and the leadership of the FEMP to approve a document that allows municipalities to use the surplus and save the current legislation that generally prevents them from using their cash surpluses.

The approved text offers the municipalities that make their remnants available to the State a contribution from the General Budgets of the State of € 5 billion in lost funds and it incorporates a last-minute «political resolution» that caters to local entities without liquidity, one of the most demanded points by political formations.

According to that resolution, a working group is created in the FEMP’s Finance Commission in charge of proposing measures and actions aimed at local governments without remnants and with problems of local financing, in addition to “detailed monitoring” at the local level of the distribution of resources from European funds.

The agreement maintains the proposal to transfer 2,000 million of its remnants to the municipalities this year and 3,000 million next year, and commits to the one hundred percent return of delivered in ten years, from 2022.

The agreement understands that the city councils will be able to use this money in actions that are developed within the scope of the urban agenda, sustainable mobility, proximity care and culture so that local entities have a prominent role in the reconstruction of the country after the emergency. sanitary.

It also contemplates from the budgets an extraordinary fund of 275 million to compensate for the deficit of the municipal transportation services during the pandemic. That fund may be expanded to 400 million euros.

This last document establishes support mechanisms for municipalities with liquidity problems or at financial risk, it is agreed not requiring municipalities to comply with the spending rule in 2020 and the commitment to study its expansion by 2021.

In addition, it is incorporated that local entities participate directly as beneficiaries of the recovery fund approved by the European Union and a working table is constituted for the future reform of local financing.

The measures included in the agreement must be regulated in a norm with the rank of law, in which deadlines or procedures are established to speed up their application.

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