This Friday morning, the Bonaerense Legislature unanimously passed the Indebtedness Act for the Province to issue new debt for 28 billion pesos and $500 million. The legislation incorporates the transfer of funds of $3 billion to municipalities, an opposition claim.
This financing to the communes was the key point that allowed an agreement to be reached between the chamber blocks. As voted, the twists anticipated by provincial economy minister Pablo Lopez will be $1.5 billion in August and another $1.5 billion in September. For the past two weeks, the possibility of an agreement was stuck. The previous session did not succeed because of Together for Change’s demands. The commitment states that dollars may be ordered from “international bodies”. The Province is preparing to launch a new debt swap bid to refinance dollar bonds issued under foreign law for about $11 billion.
On Thursday, negotiations were deburred when it was established that loans to municipalities at the start of the pandemic would have a staggered repayment. It is the Special Health Emergency Fund for Municipal Tax Containment. First it was speculated with the forgiveness of a portion of the debt. It was determined that the refund will be in 18 installments, as of January 2021.The requirements for funds for municipalities are due to the your tax revenue is in free fall. They need financial help to pay wages and meet the extraordinary costs of the health emergency. Revenue, in many cases, is down to 40%.
Articles of the rule indicate that, of the $500 million, $200 million will be earmarked for road works throughout the Province. Another 100 million will need to be used to finance educational and health development. The reference is for the construction of new educational establishments and health care centres. The last 200 million will aim to carry out civil and housing works. In this sense, the $120 million of the Salado project, which had been earmarked since the previous government management, will now be affected by housing construction. In addition, the $130 million project on the Colorado River, also enabled previously, will be used to carry out works that provide drinking water to Bahía Blanca and the surrounding locations. Finally, in relation to the agreed $20 billion, they will be charged to “regularize Treasury arrears.” The remaining 8 billion pesos will be aimed at financing letes’ issuance.
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