Thursday, January 27

The Treasury will reduce the issuance of public debt by 20,000 million, according to Calviño

The First Vice President of the Government and Minister of Economic Affairs and Digital Transformation, Nadia Calviño.

The First Vice President of the Government and Minister of Economic Affairs and Digital Transformation, Nadia Calviño.
Alberto Ortega / EP

The Prime Vice President and Minister of Economic Affairs and Digital Transformation, Nadia Calviño, announced this Thursday the decision of reduce the planned issuance of public debt by 2021 at 20,000 million euros, bringing the net issuance of debt this year by the Treasury to approximately 80,000 million euros.

After finishing the first Sectorial Conference on Regulatory Improvement and Business Climate held this Thursday at the headquarters of the Ministry of Economic Affairs, the first vice president explained that this decision was taken as a result of the imminent arrival of the first transfers of European funds, in addition to the lesser need of the autonomous communities for financing by the Treasury and due to the good evolution of the debt markets, which allow having a lower cost of debt service.

In this sense, the Minister of Economy has detailed that throughout 2021 the average interest rate of the debt issued is 0% and he has pointed out that 57% of the debt issued has done so at negative rates, that is, charging investors.

This has allowed the average interest on outstanding debt to be reduced to an all-time low to around 1.6%, while the average maturity period of the debt has been lengthened, which is already above eight years.

“These good condition of the markets of public debt they are those that allow us to reduce by 20,000 million the issues of the Treasury of the Kingdom of Spain planned for 2021, with which the net issuance would remain at 80,000 million euros, “said the vice president.

The effort in recent years to broaden and deepen the investment base has allowed the weight of international investors to remain stable, around 45%, which shows their confidence in the Spanish economy. Likewise, throughout the year a high level of demand for issues has been maintained, with a coverage ratio of 2.91, according to the Government.

With the reduction in financing needs, the bulk of financing for 2021 will continue to be obtained through the issuance of medium and long-term instruments, with a total of 174,399 million, and to a lesser extent through bills, 94,758 million.

As explained by the Ministry, the Treasury accelerated the execution of the financing program in the first half of the year, This has allowed 71.8% of the medium and long-term issuance program to have already been executed.

The 9,000 million of European funds, throughout the summer

Regarding European funds, Calviño explained that the Spanish Executive is completing the process together with the European Commission so that the first pre-financing disbursement of 9,000 million, expected in the course of the summer. In the second part of the year, the semiannual payment of 10,000 million euros will arrive, corresponding to the fulfillment of certain milestones and objectives, as recalled by the vice president.

First conference with a “constructive” climate

The conference held this Thursday is the first meeting between the Minister, the Secretary of State for the Economy, the Economic Counselors of the autonomous communities and the President of the Spanish Federation of Municipalities and Provinces.

In her, Calvin has transferred the situation of the economy in general, the lines of execution of the Recovery, Transformation and Resilience Plan and some of the most important regulatory projects that the Executive is promoting in terms of the law of business creation and growth, the bankruptcy law or that of ‘startups’.

The first vice president has made a “very positive” assessment of this first meeting, which, as she praised, has taken place in a “totally constructive” climate and the communities have made concrete suggestions in the areas in which the executive and economic managers of the different territories will collaborate as a result of the creation of this conference.

According to Calviño, the communities have expressed their interest in deepening the coordination and cooperation of the different levels of public administrations to deploy in the most efficient way the Recovery Plan that everyone sees as “a historical and unprecedented opportunity” for the country.

The Ministry has conveyed to the participants the importance of advancing in the articulation of a solid and coherent regulatory framework that generates a climate of attractive and sustainable business to promote entrepreneurship and business growth throughout the national territory.

Furthermore, at this meeting it has been agreed to set up the necessary working groups to analyze and make concrete proposals in the main areas of action.

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