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Tension with the governors: eleven provinces owe the Nation almost $400,000 million that are paid with co-participation - Infobae
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www.infobae.com
February 26, 2024
These are liabilities of the Provincial Development Trust Fund that were refinanced and are paid with discounts from the automatic distribution of funds. The crossings between Chubut and the Casa Rosada continue due to the negotiation proposals
By Mariano Boettner
Milei, in a meeting with governors at the beginning of his presidential administration
Ten provinces, in addition to Chubut, have debts with the Nation for the same Trust Fund that unleashed the conflict between the provincial government headed by Ignacio Torres and the Casa Rosada over the co-participation discount and that threatens to escalate in the coming days after the warning de Torres about the interruption of the supply of oil and gas from its basins to the rest of the country.
In total, there are eleven governorates that have liabilities before the Ministry of Economy for almost $400,000 million (as a reference, about 0.2% of GDP) refinanced and paid, on a monthly basis, throughout 2024. They are liabilities that were negotiated between the provinces and the previous Government under the Provincial Development Trust Fund and which have, as a result of this restructuring, an update according to the rate of inflation and monthly payments that are deducted from the automatic transfers of funds.
Chubut acted as the spearhead for the claim of almost all the provinces in claim for that repayment method that the Nation activated to collect that debt. Governor Ignacio Torres assured that his cabinet sought renegotiation alternatives before the Casa Rosada because the inflation update of that debt, he stated, endangered the provincial accounts by nominally increasing those amounts. According to official data, Chubut owes the Nation $119,091 million .
The Chubut government maintains that before the Nation they asked for refinancing options, including an amortization in 96 monthly installments with a two-year grace period - to begin paying in February 2026 -, with the elimination of the inflation update, which would be replaced by the Badlar bank rate, and with provincial co-participation or royalties for the exploitation of natural resources as a guarantee of payment.
There are eleven governorates that have liabilities before the Ministry of Economy for almost $400,000 million that have been refinanced and will be paid, monthly, throughout 2024.
That first alternative did not have an echo in the Casa Rosada. Secondly, Chubut requested authorization for the issuance of a bond for between 3 and 5 years to pay the Nation the debt for that trust fund destined for the provinces. The Government of Javier Milei came out yesterday Sunday to cross that version and mentioned that this proposal did not fall on deaf ears, as reported by the Chubut government, but that there was a response.
Interior Minister Guillermo Francos said yesterday through his X account that, in reality, an official from his portfolio answered this latest request from Chubut when requesting information to evaluate the financial profile of the proposal. “Contrary to what the lieutenant governor said, we responded with an email on February 23 requiring the necessary documentation to move forward with the requested issuance operation, in accordance with current regulations. “We are waiting for the response,” said the minister.
According to a document that Francos attached, the Nation asked the province for updated fiscal data, financial projection, macroeconomic assumptions included in those projections, provincial public debt stock data and an estimate of the flow of debt services once that bond could be issued. be issued. Hours later, Vice Governor Gustavo Menna came out directly to deny that this email existed . “The December and January maturities were deferred, which shows that they can do it,” Menna said in reference to the co-participation discount. “ They withheld the February contribution in retaliation for the lawsuit against the suspension of the Transportation Compensation Fund,” he responded.
That was just the latest chapter of crossings that spread between Rawson and Buenos Aires since Friday afternoon. The Minister of Economy Luis Caputo , for example, replied in X to Torres that the co-participation discount corresponds, according to the terms of the last refinancing signed, last November. The president of the Central Bank Santiago Bausili , an unusual tweeter, also appeared on the social network , who denied that the entity could block a provincial debt restructuring, an idea that the radical deputy Martín Tetaz had suggested .
Although Chubut was the first province to raise its voice against the co-participation discount - which garnered the support of all the country's governors except Osvaldo Jaldo from Tucumán -, it is only one of the eleven that also have debts to the Nation for the Trust Fund of Provincial Development. According to official data to which Infobae had access , this group of governorates accumulate debts of $392,104 million .
Guillermo Francos, in a meeting with governors last week
Possibly the explanation for why the reaction began in Chubut is because that Patagonian province represents 30% of the debt to the Trust Fund for Provincial Development. They are followed, in that ranking, by Tucumán with another $72,922 million , Chaco with $63,450 million and Salta with $55,975 million . Between these four provinces they concentrate 80% of these liabilities. Others such as Santa Cruz, Entre Ríos, Formosa, Catamarca, Tierra del Fuego, Misiones and Jujuy also appear on the payroll, with smaller amounts .
The Provincial Development Trust Fund was created by presidential decree in 1995 . Originally, its objective was to “assist Provincial Banks subject to privatization and promote the privatization of provincial companies.” At that time it was made up of 70,599,999 class A shares of YPF ($1,355 million at that time) and later included capitalization from loans from regional banks such as BIRF and the IDB and also national or provincial budget resources.
In an update of the norm that regulated it, the trust fund's objectives began to assist provinces and municipalities with privatization processes , finance provincial fiscal or financial reform programs, debt consolidation, development programs and efficiency improvement. The FFDP has an end date of February 27 next year. It will thus complete 30 years of validity and will be the maximum period of duration that it will have according to the regulations.
In a document prepared by the Ministry of Economy in November 2023, in which it reviews the history of the trust fund, it states as one of its conclusions that “the achievements achieved throughout the existence of the FFDP have accumulated valuable management experience in benefit of the provinces and the CABA and in line with the policies of the National Government, a history that is a relevant precedent to evaluate the continuity of this type of tools for economic, fiscal and financial management between the National Government and the Argentine provinces. Almost like a paradox, that fund ended up being the focus of a serious conflict between the Casa Rosada and the governors that this week could escalate even more.
Source:
Tensión con los gobernadores: once provincias le deben a Nación casi $400.000 millones que se pagan con coparticipación
Se trata de pasivos del Fondo Fiduciario de Desarrollo Provincial que fueron refinanciados y se pagan con descuentos del reparto automático de fondos. Siguen los cruces entre Chubut y la Casa Rosada por las propuestas de negociación
www.infobae.com
February 26, 2024
These are liabilities of the Provincial Development Trust Fund that were refinanced and are paid with discounts from the automatic distribution of funds. The crossings between Chubut and the Casa Rosada continue due to the negotiation proposals
By Mariano Boettner
Milei, in a meeting with governors at the beginning of his presidential administration
Ten provinces, in addition to Chubut, have debts with the Nation for the same Trust Fund that unleashed the conflict between the provincial government headed by Ignacio Torres and the Casa Rosada over the co-participation discount and that threatens to escalate in the coming days after the warning de Torres about the interruption of the supply of oil and gas from its basins to the rest of the country.
In total, there are eleven governorates that have liabilities before the Ministry of Economy for almost $400,000 million (as a reference, about 0.2% of GDP) refinanced and paid, on a monthly basis, throughout 2024. They are liabilities that were negotiated between the provinces and the previous Government under the Provincial Development Trust Fund and which have, as a result of this restructuring, an update according to the rate of inflation and monthly payments that are deducted from the automatic transfers of funds.
Chubut acted as the spearhead for the claim of almost all the provinces in claim for that repayment method that the Nation activated to collect that debt. Governor Ignacio Torres assured that his cabinet sought renegotiation alternatives before the Casa Rosada because the inflation update of that debt, he stated, endangered the provincial accounts by nominally increasing those amounts. According to official data, Chubut owes the Nation $119,091 million .
The Chubut government maintains that before the Nation they asked for refinancing options, including an amortization in 96 monthly installments with a two-year grace period - to begin paying in February 2026 -, with the elimination of the inflation update, which would be replaced by the Badlar bank rate, and with provincial co-participation or royalties for the exploitation of natural resources as a guarantee of payment.
There are eleven governorates that have liabilities before the Ministry of Economy for almost $400,000 million that have been refinanced and will be paid, monthly, throughout 2024.
That first alternative did not have an echo in the Casa Rosada. Secondly, Chubut requested authorization for the issuance of a bond for between 3 and 5 years to pay the Nation the debt for that trust fund destined for the provinces. The Government of Javier Milei came out yesterday Sunday to cross that version and mentioned that this proposal did not fall on deaf ears, as reported by the Chubut government, but that there was a response.
Interior Minister Guillermo Francos said yesterday through his X account that, in reality, an official from his portfolio answered this latest request from Chubut when requesting information to evaluate the financial profile of the proposal. “Contrary to what the lieutenant governor said, we responded with an email on February 23 requiring the necessary documentation to move forward with the requested issuance operation, in accordance with current regulations. “We are waiting for the response,” said the minister.
According to a document that Francos attached, the Nation asked the province for updated fiscal data, financial projection, macroeconomic assumptions included in those projections, provincial public debt stock data and an estimate of the flow of debt services once that bond could be issued. be issued. Hours later, Vice Governor Gustavo Menna came out directly to deny that this email existed . “The December and January maturities were deferred, which shows that they can do it,” Menna said in reference to the co-participation discount. “ They withheld the February contribution in retaliation for the lawsuit against the suspension of the Transportation Compensation Fund,” he responded.
That was just the latest chapter of crossings that spread between Rawson and Buenos Aires since Friday afternoon. The Minister of Economy Luis Caputo , for example, replied in X to Torres that the co-participation discount corresponds, according to the terms of the last refinancing signed, last November. The president of the Central Bank Santiago Bausili , an unusual tweeter, also appeared on the social network , who denied that the entity could block a provincial debt restructuring, an idea that the radical deputy Martín Tetaz had suggested .
Although Chubut was the first province to raise its voice against the co-participation discount - which garnered the support of all the country's governors except Osvaldo Jaldo from Tucumán -, it is only one of the eleven that also have debts to the Nation for the Trust Fund of Provincial Development. According to official data to which Infobae had access , this group of governorates accumulate debts of $392,104 million .
Guillermo Francos, in a meeting with governors last week
Possibly the explanation for why the reaction began in Chubut is because that Patagonian province represents 30% of the debt to the Trust Fund for Provincial Development. They are followed, in that ranking, by Tucumán with another $72,922 million , Chaco with $63,450 million and Salta with $55,975 million . Between these four provinces they concentrate 80% of these liabilities. Others such as Santa Cruz, Entre Ríos, Formosa, Catamarca, Tierra del Fuego, Misiones and Jujuy also appear on the payroll, with smaller amounts .
The Provincial Development Trust Fund was created by presidential decree in 1995 . Originally, its objective was to “assist Provincial Banks subject to privatization and promote the privatization of provincial companies.” At that time it was made up of 70,599,999 class A shares of YPF ($1,355 million at that time) and later included capitalization from loans from regional banks such as BIRF and the IDB and also national or provincial budget resources.
In an update of the norm that regulated it, the trust fund's objectives began to assist provinces and municipalities with privatization processes , finance provincial fiscal or financial reform programs, debt consolidation, development programs and efficiency improvement. The FFDP has an end date of February 27 next year. It will thus complete 30 years of validity and will be the maximum period of duration that it will have according to the regulations.
In a document prepared by the Ministry of Economy in November 2023, in which it reviews the history of the trust fund, it states as one of its conclusions that “the achievements achieved throughout the existence of the FFDP have accumulated valuable management experience in benefit of the provinces and the CABA and in line with the policies of the National Government, a history that is a relevant precedent to evaluate the continuity of this type of tools for economic, fiscal and financial management between the National Government and the Argentine provinces. Almost like a paradox, that fund ended up being the focus of a serious conflict between the Casa Rosada and the governors that this week could escalate even more.
