Government authorises Catalonia and Murcia to formalise short-term debt operations

Moncloa Palace, Madrid

The Council of Ministers authorised the Autonomous Region of Catalonia to formalise short-term debt operations for a maximum sum of 685.67 billion euros.

The acting Vice-President of the Government, Soraya Sáenz de Santamaría, pointed out that this agreement "seeks to reduce the current uncertainty over the authorisation for lending institutions and rating agencies and so that the region can have an increased time margin in which to formalise new operations".

The Government Spokesperson clarified that "this authorisation does not represent an increase in the debt of the autonomous region at the end of the year, but rather is subordinated to compliance with the debt target for the year, which stands at 41.4% of regional GDP".

Soraya Sáenz de Santamaría explained that "the authorisation dates back to the application made by Catalonia in April to formalise short-term debt operations for the sum of 5.1 billion euros, of which 4.2 billion were authorised to finance its debt maturities in the month of July". Following this new authorisation, she added, "the debt maturities for the months of August and September can be re-financed, and hence we are offering the autonomous region a time margin in which to carry out this re-organisation, as we had been requested to do".

The government also authorised the Region of Murcia to formalise another short-term debt operation for a maximum sum of 215 million euros. Of this sum, in line with the application made by the region, 95 million euros will be allocated to re-financing credit lines and policies and loans with short-term maturities, and 120 million euros to cover pressure on liquidity on temporary grounds.

Aid for storm damage

Pool Moncloa / J.M.CuadradoThe government agreed to grant extraordinary aid, for the sum of 19.7 million euros, to repair the damage caused by the rain storms back in September and October 2015 in the Autonomous Region of the Canary Islands and in the south and east of the Spanish mainland.

According to the Vice-President of the Government, this action will be charged to the Contingency Fund provided for in the General State Budget. "This aid, envisaged in the Decree Law of 30 October 2015, will be allocated to projects implemented by local authorities in these autonomous regions for the repair and restoration of the damage caused to municipal infrastructures and in the road network covered by the island councils and provincial councils".

Technological renewal of CNI

Pool Moncloa / J.M.CuadradoThe government agreed to take on spending commitments carried over to future financial years after 2016, with the aim of enabling the National Intelligence Centre (Spanish acronym: CNI) to contract technological renewal projects and make investments in infrastructures, for a sum of 60 million euros.

The Intelligence Directive currently in force has allocated maximum priority to the tasks of the CNI in the fight against Jihadi terrorism and cyber-security. The Vice-President of the Government claimed that a technological improvement and renewal is necessary so that Spain and the Western intelligence community can employ "new instruments with a singular value" to carry out the missions assigned to them.

56 million euros in savings made by State Peripheral Administration

Pool Moncloa / J.M.CuadradoThe Council of Ministers analysed a report on the functioning of the services of the State Peripheral Administration corresponding to 2015.

Soraya Sáenz de Santamaría reported that between the years 2012 and 2016 a saving has been made by the State Peripheral Administration of 56 million euros, mainly in running costs.

The Vice-President of the Government highlighted that, within the framework of the reform of the Public Administration Services, this public authority has made a 22% adjustment in its vehicle fleet, by reducing the number of official vehicles by 124, and has centralised the procurement of its electricity, telecommunications, fuel and postal services in all provinces.

Furthermore, the Government Spokesperson underlined that "significant progress has been made in reducing the number of public buildings", with a reduction of official buildings from 363 in 2011 to 300 in 2015, together with a lowering of the costs of pre-existing leases and the optimisation of spaces. She also highlighted that there has been very close collaboration between civilian and military personnel.

On another note, the government approved two Royal Decrees granting Spain's representation at the ceremonies to swear in the Presidents of the Republic of Peru and of the Dominican Republic, scheduled for 28 July and 15 August, respectively to the former King, Juan Carlos.

Current affairs

Pool Moncloa / J.M.CuadradoWhen asked about the maximum deadline within which a government can be formed to allow it to approve the various budgets for the year 2017, the Vice-President of the Government explained that, prior to its procedural passage, it is necessary to approve the so-called "spending cap" to which end the European institutions need to determine the new path of fiscal consolidation for the rest of 2016 and for the coming year. This path must then be ratified by the Spanish Parliament and thenceforth "if things go to plan", the Draft General State Budget for 2017 must be presented to the Lower House of Parliament by 30 September.

"Should this deadline not be met", stated Soraya Sáenz de Santamaría, the 2016 Budget would automatically be extended, which would not affect certain budget items, such as the adjustment to pensions and the remuneration of public servants. In order to tackle these issues, a Royal Decree-Law would need to be approved.

The Government Spokesperson highlighted the "intense, constant and discrete" contacts being held by the President of the Government with the "pro-Constitution parties" which she considers could be useful for "taking steps in the direction he advocates", as contained in the document he has presented them with.

As regards the meeting held on Thursday, 21 July with the Vice-President of the Regional Government of Catalonia, Oriol Junqueras, which was also attended by the acting Minister for the Treasury and the Public Administration Services, Cristóbal Montoro, the Government Spokesperson said that, among other issues, they tackled the possibility of locating the headquarters of the European Medicines Agency in Barcelona following the 'Brexit'. She also highlighted that she feels that what the Regional Government of Catalonia is doing is "positive" and that both governments are "strongly involved" in "strengthening Spain's position within the EU and Barcelona's position within Spain".

Soraya Sáenz de Santamaría confirmed that the Council of Ministers granted a partial pardon, replacing imprisonment with community service, given the special circumstances of the case, to María Salmerón, sentenced for breaching the visitation rights of her ex-husband to see their daughter.