La Rioja closes the year 2016 fulfilling the objective of budgetary stability

  • The Minister of Public Administration and Finance, Alfonso Dominguez, announced this Friday that La Rioja has closed the year 2016 "fulfilling the objective of budgetary stability" in terms of public debt set by the Fiscal and Financial Policy Council for 2016 in the 18.3 percent of GDP.
Consejo de Gobierno

Governing Council DIAZ URIEL

Specifically, he explained, the debt of La Rioja, in absolute terms, was placed in the fourth quarter at 1,487 million euros, which is 51 million more than in 2015. With these data, and in the words of the Minister of the field , "La Rioja has closed a good year from the point of view of budget execution and we maintain the image of rigor and good management that is the basis of the sustainability of public policies and welfare."

Data "that help us maintain levels of provision of public services, strengthen economic growth and job creation and reduce taxes on citizens."

NEW BUDGET STAGE MARKED BY INTERNATIONAL UNCERTAINTY

After knowing these results – he has emphasized – "we face during this year a new stage from the budgetary point of view where, with consolidated accounts, we will be able to realize public policies that come from the social and economic agenda of the Government to continue supporting the economic growth and the creation of employment in 2017 in our region. "

All this, through a financing strategy that "requires modifications with respect to these first two years of the legislature" because "we must be aware that the year 2017 has a series of international financial uncertainties (such as the impact of the 'brexit', the next meeting between leaders of the US and China or the instability in some financial systems of Europe) "that will force us to draw a new trend in our debt strategy".

Given this situation, interest rates "will begin to rise in the medium term (end of year or early next) and therefore we must adapt to this situation."

STRATEGY IN DEBT 2017

Thus, he stressed, today "we have presented an indebtedness strategy throughout 2017 that will allow us to mobilize 251,710,000 euros in debt" and that will go to three types of operations.

Of this amount, 210.51 million euros will be used to finance the long-term amortizations foreseen by the Autonomous Community in 2017; 9.8 million euros for the return of the negative settlements of the CCAA financing system for 2008 and 2009; and 31.40 million euros to finance the deficit.

"The authorizations that we have created will lead us to the fact that due to the good management situation, we will not need to increase debts and we will be able to begin to reduce the indebtedness of the community," he stressed.

In addition, if "in these two years we have opted to go to the short-term debt that offered low interest rates for our solvency at this time in this situation and to better protect the interests of Rioja is better to go to a time strategy longer in the loans and that they are of fixed rates ".

Thus, throughout this year, the Riojan Executive will continue, on the one hand, restructuring the debt portfolio so that the improvement of financing conditions will allow us to reduce costs, and on the other hand, facing the debt amortizations. In addition, the Government of La Rioja wants to be prepared for the change in trend of interest rates, so it has already closed several debt issuance operations for 60 million euros and bank loans with three entities worth 90 millions.

With all this, the Government of La Rioja expects not to increase the debt of the community beyond the financing of the negative settlements and the deficit.

In this context, Alfonso Domínguez has informed the Governing Council of the Finance Strategy of the Ministry of Finance for the year 2017, "which has evolved to adapt to the current economic context and the situation of the markets."

On the other hand, the Government of La Rioja does not close the door to avail itself of any financing mechanism, as long as it does not have any conditionality or cost, since La Rioja is complying with the objectives of budgetary stability.

Also, throughout 2017, the regional executive will continue to work to provide credit to companies through the call for a new line of financing, endowed with around 25 million euros, to finance business projects through EIB funds; and through the SME initiative, to provide loans to companies that, being viable, exceed the risk levels established by the bank.

Finally, before the possibility that the Government of Spain approves a withdrawal of the regional debt, "the Rioja Executive will ensure that any measure of cancellation of the debt of the autonomous communities take into account the efforts of those regions, such as La Rioja , are fulfilling the objectives of fiscal consolidation, so that they are not harmed, "he said.

Currently,

90.91% of the debt of the Autonomous Community of La Rioja is covered with long-term debt (of which, 30.09% are public debt issues and 69.91% bank loans) and a 9, 09% in the short term.

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