Finance develops another plan for payments to suppliers

The Executive plans to another line of credit so that the autonomous communities may pay the outstanding invoices and reduce delinquency. The new plan of payment to suppliers, which will probably have about 2.5 billion euros, will serve for these administrations may settle some debts that were not included in the previous plan launched by the Government early last year.

The Government excluded the first plan of payment to suppliers some conventions of the administrations, universities and some health bills, among others. Despite this, autonomies accepted the plan by 17 billion euros. The new credit line, which is still being studied, will be endowed with about 2.5 billion, admit in the Ministry of finance, which insist that neither the figure nor the mechanism are still closed.

In the Department the Minister Cristóbal Montoro, they clarify that the amount of the new line of credit will depend on the markets. Government is talking with banks and the Instituto de crédito Oficial (ICO) to determine the conditions and the amounts that are willing to finance.

The credit line aims to reduce the delinquency of the administrations

The new plan prepared by the Ministry of Finance also serves to respond to the claims of some communities calling for a special credit line to finance the deficits of previous years. From 2010 the Government only allows communities borrow the limit of permissible deficit. But in recent years, almost all communities have been exceeded this limit.

The first suppliers plan served to absorb part of this excess, but most of these administrations drag debt with suppliers year after year. However, since finance require that communities what they should do in these cases is to advance in the adjustment (reduce spending or raise revenue) plans to absorb the deficit from previous years and to settle outstanding debts.

The Minister of finance to reduce the delinquency of the autonomies. To do so, it has already announced is willing to withhold funds to communities and local councils. "No administration may be financed at the expense of not paying suppliers, even temporarily or to win a year", said the Minister a few weeks ago.

Finance; Economic; Business

Finance; Economic; Business

Title Post: Finance develops another plan for payments to suppliers
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