Parliament discussed on Friday proposals to modify the Local Finance Law (LFL) of the PCP and the Government, to alleviate the indebtedness margin of the municipalities, contributing to the implementation of the Recovery and Resilience Plan (PRR).
The Government bill was approved by the Council of Ministers on February 2 and aims to modify the LFL to approve an exceptional regime that increases the limit of the margin of indebtedness of municipalities from 20 to 40%, as long as it refers to projects not co-financed during the year 2023.
The objective is for the municipalities to advance with the investment projects and thus accelerate the execution of the PRR, which must be executed by 2026. “This law seeks to support the investment capacity of local authorities, with a view to ensuring the rapid implementation of the Recovery and Resilience Plan for the period 2021-2026, in a context in which the impacts on supply chains derived from the coronavirus pandemic the Covid-19 disease, as well as the economic impacts of the world crisis derived from the war in Ukraine, with particular expression in the cost of energy and in the prices and availability of raw materials, materials and labor ”, highlights the Government.
This proposal also provides for an extension of the period for municipalities to use medium- and long-term loans from the current two to three years, starting on January 1, 2023.
It also provides for “an exceptional and temporary regime applicable to loans that have been contracted before December 31, 2022, extending the term until December 31, 2026”, the PRR deadline, so that municipalities do not have to take out loans for higher interest rates to be able to repay the loans taken out before the increase in interest rates.
On your invoice, The PCP proposes to strengthen the financial capacity of local governments through “adjustments to the law, focused mainly on the area of indebtedness and budget balance, in a context in which current expenses increase.”
The PCP intends to clarify that the Municipal Social Fund (FSM) “must have at least 2% of the average income of the IRS, IRC and VAT” charged by the municipality and that mechanisms be ensured that increase the decision-making capacity of the municipalities in matter of the allocation of this income.
The communists want “the amortization of exceptional loans not to count for the calculation of the average amortization of medium and long-term loans” and that the procedures for obtaining a loan from the European Investment Bank (EIB) be facilitated, provided that They are intended to finance the national counterpart of projects supported by the European Structural and Investment Funds.
They also propose that loans intended exclusively to finance investments in energy efficiency and in the water supply, sanitation and urban waste management sectors should not be included in the total debt limit.
Housing Minister assures that all PRR measures are programmed
Source: Observadora
