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The Government will assume the payment of the interest that local entities paid to financial institutions for having deposited their remnants, so that the councils who provide these savings to the Ministry of Finance will benefit from an effective interest rate of the 0% and can save you up to 70 million euros per year.
As has informed the Ministry of Maria Jesus Montero in a press release picked up by Europa Press, the BOE has published this Tuesday by the terms of the loan voluntary, the remains of which are agreed with the Spanish Federation of Municipalities and Provinces (FEMP).
In this mode, the local entities that benefit from this fund budget of 5,000 million also have the possibility to opt for a refund to 15 years and obtain an interest rate of 0.05%.
At present, the local entities that have these remnants continue to pay interest to the banks for have deposited there this money. However, with this formula, the Treasury aims to be the Central government which assumes this cost.
last Tuesday, the Council of Ministers transformed the controversial agreement with the FEMP in a decree law that will be repealed or validated in the Congress of Deputies. According to advocates, the Ministry of Mary, Jesus Montero, this formula published this morning allows local entities to increase their ability of spending without incurring deficits public , in compliance with the Law of Budgetary Stability and with the Constitution.
The agreement between the Treasury and the grouping municipal-provides that the annual rate of interest determined for the loan formalized “may not exceed the equivalent cost of financing the debt of the State.”
This legal status gives an interest rate negative for the loan to ten years. The resolution approved this morning in the official state gazette, establishes that the loan with straight-line amortization annual to ten years will result in an interest rate -0.192%, more favorable than that which the local entities must pay today for having their remnants in the banks. In any case, the Treasury undertakes to assume the financial cost of the operation in such a way that the repayment to 10 years carries an interest rate of 0%.
with Regard to the distribution, the Government will transfer to local entities to a maximum of 2,000 million in this year and 3,000 million in 2021 . The money will be released in two years in order to meet the request of the EMFF provide to the local authorities a sufficient period of time to run the 5,000 million.
The city councils and the other local entities have until September 15 to transfer to the Ministry its firm commitment, binding, and indispensable to transfer its remaining cash.
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