LIQUIDITY MECHANISM FOR THE REGIONS
July 13th 2012
1. GENERAL SCHEME
Spanish Treasury
Beneficiary Autonomous Regions
Non participating Autonomous Regions
Liquid ity (Loan s)
Funds
Backe d reven by Tax ues fr om partic i p a Auton t omou ing s Reg ions
Liquidity FUND* *Managed by ICO
Tax revenues from Autonomous Regions
Ministry of Finance
Monitoring of Rebalancing Plans/ Monitoring of Cash position 2
2. FUNDING 1. Amount: up to 18 billion euros 2. Beneficiaries: Autonomous Regions that voluntarily adhere 3. Financed concepts: cash requirements due to: a) b) c)
Redemptions in capital markets Redemptions of loans by international bodies Current deficit needs
4. Creditor: Central Government.- ICO will manage the FUND 5. Financial conditions: To be determined by the Government 6. Funding Sources: 1. 2.
Lotteries: Extraordinary dividend payment (€6 bn) Treasury’s Financial Resources
7. The debt will be Autonomous Regions’ Debt and not State Debt 8. The inclusion of the liquidity mechanism’s funding needs will not alter the Kingdom of Spain’s funding programme for the rest of the year. 3
3. FISCAL AND FINANCIAL CONDITIONALITY 1. Fiscal Conditionality: a) b) c) d) e) f)
Updated Rebalancing Plans with additional information on Cash balance of each Autonomous Region The Rebalancing plans must be approved by the Government Monthly budgetary execution reporting and assessment on the implementation of the Rebalancing Plan Additional control by State Auditor’s Office Potential direct intervention of the budget accounts in case of risk of deviation from Rebalancing Plans (Art. 26 of Budget Stability Law) Only current deficit needs in line with target will be authorised
2. Financial Conditionality: a) b)
Restrictive Financial conditions for the beneficiary Autonomous Region All new debt authorisations require Treasury’s approval
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