On October 18, the Senate’s Budget and Finance Committee passed the bill aimed at “strengthening the sustainability of the public debt.” After listening to the Minister of Economy, Martin Guzman, committee chairman Carlos Caserio (Frente de Todos – ruling party) proposed adopting the text to comply with the seven days enshrined in the regulations, so that they can discuss the initiative in a session next week.
A modification proposed by the Frente de Todos was made which adds the following paragraph to Article 56 of the Financial Administration Law (24,156):
“The issuance of public securities in foreign currency and under foreign law and jurisdiction, as well as the financing programs or public credit operations carried out with the International Monetary Fund and the eventual extensions of the amounts of those programs or operations, may not be used to finance current expenses, considering within this classification those defined in the economic classification of the expense”.
According to Senator Anabel Fernández Sagasti (Frente de Todos), the purpose is that funds related to debt may only be used for capital goods and productive investments.
Before the debate, Minister Guzmán defended the bill sent by the Executive Branch and said that it aims to “restore recovery and development possibilities. We consider that this is the right time to send this draft because the restructuring has already been completed and we are in the process of negotiations with the IMF,” he said.
At the same time, he expressed that “the National Congress must play a more important role in the process of safeguarding and sustaining the sustainability of the public debt.”
The bill aims to strengthen the Congress’s institutional role when defining and authorizing the national public debt policies in foreign currency under foreign law and jurisdiction, regarding the approval by any public credit operation and/or financing program formalized by the Executive Branch with the International Monetary Fund (IMF).