Strictly speaking, it is the Provincial Development Trust Fund (FFDP), which was created in 1995 “in order to assist and finance development programs, improve efficiency, increase the quality of services and generally strengthen the sectors of the real economy, education, justice, health and safety and the consolidation of the fiscal and financial situation ”, they officially explained.
By law, the Government has the power to implement programs to assist the provinces and the City of Buenos Aires “with financing to attend to the financial deficit and to regularize treasury arrears for salaries and essential services”, through this Trust fund.
How will the refund be?
The National Treasury will grant the Fund the necessary financing and it must repay the loans received from the National State by transferring the reimbursement made by the jurisdictions participating in the Program. To do this, the National Bank to transfer the respective funds in favor of the Treasury.
For their part, the provinces must submit the corresponding applications to the Trust Fund, stating the amounts and the basic information of the requirement.
The financial conditions for reimbursement of this assistance include the amortization of the capital in 30 consecutive monthly installments, and a grace period until June 30, 2022, with which the first maturity will operate on the last business day of July next year.
These loans will accrue interest from each disbursement on the capital updated by the Reference Stabilization Coefficient (CER) published by the Central Bank, an indicator that follows the evolution of inflation published by the Indec. Interest will be capitalized until June 30, 2022, will be payable monthly and will have a surcharge of 0.10 percentage points.
The principal of the loan will be adjusted from the disbursement according to the CER (Reference Stabilization Coefficient, published by the Central Bank) corresponding to the period elapsed between the date of each disbursement and that of each maturity. As a guarantee, the provinces will present the rights on the sums to be received by the Federal Tax Co-participation Regime, until the total cancellation of the capital with the interest and expenses owed.
In any case, they added, the norm does not establish a maximum amount to be lent. “The financial assistance needs are technically evaluated taking into account the financial situation of the provinces, their debt capacity and the possibilities of alternative sources of financing for the implementation of public policy programs for the development and strengthening of the fiscal situation of the provinces. Eventually it will be able to adapt to the realities and needs of each province ”, continued the official sources.
“It is essential to take measures to sustain the finances of the jurisdictions that need it through an assistance program that makes it possible to attend to both their normal operation and to cover the financial needs, to the extent of the National Government’s possibilities and as long as they do not present other sources of financing, guaranteeing the sustainability of its financial and fiscal scheme “explained the Palacio de Hacienda in the Official Gazette.
Source From: Ambito
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