Authorities of the Ministry of Economy and Finance (MEF) they appeared before the General Assembly of Parliament to formally request an increase in the Net Indebtedness Ceiling, established mainly due to the impact of the water crisis.
He Executive announced at the end of June that it was going to need to increase its financing due to losses due to the drought in the country, estimated at at least 1.8 billion dollars, a scenario that will aggravate the deficit in the second semester in the Uruguayan economy.
A delegation from the MEF headed by Undersecretary Alejandro Irastorza appeared before the General Assembly, which also included the director of Economic Policy, Marcela Bensión; the director of the Debt Management Unit (UGD) Herman Kamil; and adviser Ramiro Correa.
There, the Executive Branch considered that “the current water deficit emergency has made it necessary to request the General Assembly to activate the aforementioned safeguard mechanism for extraordinary events.” It is a clause contemplated by article 699 of the Law No. 19,924 on the National Budget of 2020. There it is established that it can be increased up to 30% Net Indebtedness (EN) before “extraordinary circumstances” something that had already happened due to the pandemic.
The EN legal cap was set at $2.2 billion last year, but considering 30% of the expansion, equivalent to 660 million, will remain at 2.860 million dollars. From the MEF they recalled that the same mechanism was applied in 2021 because of the coronavirus Pandemic, opportunity in which the debt ceiling was raised to 2.7 billion dollars.
Crossroads and Chicanas between the government and the Broad Front
When referring to the decision to increase the indebtedness, in the previous hours there was a new meeting between leaders of the official coalition and the broad front (FA). Mario Bergara, senator from the opposition space, chicaned the ruling party by pointing out: “When we did it, the opposition at the time I put the scream in the sky ”.
Still, he did not criticize the situation. “We do not put the cry in the sky, we don’t do petty politicking with these kinds of things that are management issues and the logic of fiscal and debt policy,” Bergara told Telemundo.
In dialogue with the same outlet, his partner from National Party, Jorge Gandini, He stated that these are two different scenarios, considering that in the previous administration “they increased the debt, they paid it and a year later they asked us for authorization to increase the debt, that was the fundamental criticism.”
Regarding the increase in indebtedness, he stressed that “the prolixity with which that variable is taken in this government is much higher”. In any case, he was not satisfied with the decision. “I am still critical, but less critical”, explained.
Source: Ambito
