FEDERACION ESPAÑOLA DE MUNICIPIOS Y PROVINCIAS
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The municipalities with better financial situation in 2011 may borrow
The municipalities that have an adequate level of indebtedness may require long-term loans next year, as communicated by the Ministry of Economy and Finance at the FEMP. At the same time has confirmed that deliveries to account for the PIE for 2011 will increase by 9% from 13246.16 to 14443.46 million.
The measure announced will involve a modification of the conditions that were laid down in Royal Decree on containment of the deficit approved last May and responds to the request of FEMP that take into account the financial situation of the municipalities when establish criteria to limit debt.
In the meeting with the FEMP, which was attended by the President, Pedro Castro, and the spokespersons of the Executive Committee, together with the Secretaries of State for Finance, Carlos Ocaña, and Territorial Cooperation, Gaspar Zarrías, the Ministry of Economy and Finance reports that fed into the Bill of General State Budget for 2011 an amendment to Article 14.2 of Royal Decree that will allow consultations operations long-term financial debt to those local bodies where the total volume of debt outstanding does not exceed 75% of their current income.
This provision will not affect the deficit reduction targets, due to the time elapsed since the approval of Royal Decree has managed to stabilize the Spanish debt in financial markets, as explained by the Second Vice-President of the Government, Elena Salgado , in his speech at the Congress of Deputies.
The meeting also agreed to keep open the dialogue between the FEMP and the Government to reach an agreement to solve the problems that credit constraints may pose for multiyear projects financed works currently in progress, as well as providing local entities struggling to pay suppliers.
A respite for local councils
The President of the FEMP, Pedro Castro, after the meeting at the Ministry has positively assessed the extent of government debt to qualify the ban, calling it "breathe" because it involves altering a situation of negative discrimination and because, as stated, allow municipalities to continue rushing investment and social policies.
With regard to local finance, Pedro Castro, said that "we remain ready to negotiate" with the Government's new model and date of entry into force, so that the councils have a horizon to enable them to undertake specific plans feasibility.
The President of the FEMP has reiterated the commitment of local governments to "pitch in and tighten their belts" and "share responsibility with economic measures arising from the government to end the crisis"
