The Council of Ministers has approved a decree law which immediately gives way to the payment of overdue commercial debts of the public administration. The provision immediately releases the credits held by companies, cooperatives and professionals for an amount of 40 billion, which will be disbursed over the next twelve months. Only later will the banks also benefit from the payments.
“The time has come to turn the page – said Prime Minister Mario Monti in the final press conference -. That of the debts of the Public Administration is a very emblematic case of how, while the constraints of compulsory discipline were tightened, the administrations had instead responded with forms that unloaded the burdens on the future and on businesses and citizens”.
However, today's provision is only a first step: the final goal is the elimination of the entire commercial debt stock of the PA, estimated by Bank of Italy at approximately 90 billion (also including unexpired debts). The decree therefore obliges all the Administrations to carry out a complete census of all overdue or due trade payables still outstanding and to produce a complete list of debts still to be honored. The completion of payments will be scheduled with the 2014 Stability Law through resources intended primarily for liquidation, in the form of government bonds, of credits previously transferred by companies to the banking system.
All without exceeding the European deficit limit of 3%, so that Brussels can close the open procedure against our country on this front in May. The decree is accompanied by a series of measures to contain spending within the pre-established limit and thus not exceed the precautionary deficit threshold of 2,9% (a figure that is up on the 2,4% previously estimated for 2013). To this end, targeted monitoring is expected to be carried out in September which, if the limit is exceeded, will allow the Minister of the Economy to remodulate expenditure.
The decree, in line with the guidelines of the European Union, provides for the following measures:
RELEASE OF THE INTERNAL STABILITY PACT
Exclusion for 2013 from the Internal Stability Pact of payments of sure, liquid and payable debts of the capital part (investments already made by the Public Administrations) for an amount of 5 billion euros as regards local authorities, 1,4 billion as regards regards the Regions, 500 million as regards the central administrations and 800 million for investments co-financed by the European structural funds, necessary to allow the achievement of the spending targets.
CREATION OF A FUND INTENDED FOR THE PAYMENTS OF THE DEBTS OF REGIONS, PROVINCES AND MUNICIPALITIES
The establishment in the State budget of a single Fund - with an endowment of 26 billion euros - is envisaged, divided into three dedicated and communicating sections, for the payment of certain debts, liquid and payable respectively of the local authorities (2 billion in 2013 and 2 billion in 2014), of the Regions for debts other than healthcare debts (3 billion in 2013 and 5 billion in 2014) and again of the Regions but for healthcare debts (5 billion in 2013 and 9 billion in 2014).
PAYMENT PROCEDURES
The decree also outlines specific procedures to be followed to obtain payments from public administrations. In particular:
– Municipalities and Provinces, by April 30th, will request authorization from the Ministry of the Economy for the payments to be made, which will be authorized by May 15th and financed with the bodies' available liquidity. By June 15, the Administrations will have to communicate the amounts and timing to the beneficiary companies of the payments. From now on, pending authorisation, the Municipalities and Provinces can in any case start paying their debts within the limit of 50% of the scheduled payments.
– Municipalities, Provinces, Regions and Local Health Authorities, if they have no liquid assets, can obtain financing from the new Fund. They will apply to the Ministry of the Economy for the resources necessary for payments by 30 April and must receive them by 15 May.
– By 31 May 2013, the debtor PAs must notify the creditor companies of the payment plan.
As part of these procedures the request for certification by the creditor companies will not be necessary, but it will be the direct responsibility of the Administration to identify the creditors and the amounts to be paid. In the event of requests for payments for amounts exceeding availability, the Administrations will follow the criterion of the age of the expired credit: first the credits not assigned without recourse in order of "seniority", then the credits assigned without recourse in order of "seniority". .
The administrations that will take advantage of the Treasury loan are required to present an amortization plan for the repayment of the loan within a period of up to a maximum of 30 years and at a subsidized interest rate, determined on the basis of the market yield of the BTPs at 5 years old. No new constraints have been introduced on spending or investment plans.
To complete the programme, the decree also envisages further measures which will make it possible to identify the residual part of overdue and unpaid trade payables and will make it possible, with the next stability law, to arrange for payment during 2014:
– By the next September 15, the ABI will have to prepare the list of debts transferred to banks and financial intermediaries authorized by the creditor companies towards the public administrations. On the basis of this list, it will be possible to program the payment, during 2014, of the credits assigned with public debt securities.
– Simplification and tax relief of credit assignments. The decree envisages that credit transfer contracts are exempt from taxes and duties and simplifies the procedures for completing them.
- Expansion of the possibility of offsetting credits and debits with the PA. The already existing possibility of offsetting certified commercial credits with registered tax debts is extended to tax debts resulting from assessment deeds with adhesion. The threshold for offsetting tax receivables and payables is also raised from 500 to 700 euros (benefit for businesses estimated at at least two billion euros in 2013).
– Mandatory universal activation of the certification procedure. The decree provides that all Administrations will be obliged to enter the IT platform for certification set up at the State General Accounting Department within 20 days of its entry into force.
– To ensure the completion of the liquidation process of all pre-2012 trade payables that have not yet been paid off, all the Administrations are called by 15 September to complete the recognition of the accumulated overdue or maturing trade payables still pending and to produce, without obligations or charges for businesses, the certified list of all outstanding debts. The completion of the liquidation process will be scheduled with the 2014 Stability Law.
TARES: BALZELLO POSTPONED
The decree approved today also contains the important and awaited news on Tares, the new tax on waste. The first installments will be paid with the same parameters as the old Tarsu and Tia, while the payment of the increase of 2013 euros per square meter already envisaged by the Salva Italia decree will be deferred to the last relative installment for 0,30. However, the undersecretary to the Prime Minister, Antonio Catricalà, underlined that between now and the end of the year, the new Parliament and the new Government could find sufficient coverage to cancel this increase.
