Wednesday, 23 June 2021 22:27

Assembly approves the reform of the decrees that allow for the management of funds to address the pandemic and reactivate the economy

Written by Alondra Gutiérrez

With the approval of the reform of Legislative Decrees 608 and 804, which were approved by the last Assembly, the Government is able to manage the funds for the complementary budget for this year's fiscal year, which will be used to attend the health crisis caused by Covid-19 and the reactivation of the country's economy.

Before the approval of the reform of these decrees, the minister of Finance, Alejandro Zelaya, said that the Constitution of the Republic, gives the Ministry the power to manage public finances, among which there are several mechanisms, which may be the issuance of securities or other financial operations.

The Minister of Finance asked the Legislative Assembly for authorization to process the funds through securities, contracting loans or through a combination of both options.

Likewise, during the plenary session, with 63 votes, the deputies also amended Legislative Decree 608 which empowered the executive to obtain US$2,000 million, these funds are destined to attend the sanitary emergency caused by Covid-19 and for the economic recovery of the country.

This decree was issued in march 2020 and in december reforms were made to it, which took away from the Ministry of Finance the power to issue credit securities.

In addition, the legislature, before the reform of the decrees, also without consultation with the Executive, changed the destination of the funds, distributing the US$ 2,000 million to be distributed in the following manner: US$366.7 million to the municipalities for the development of projects, US$125 million for the state contribution to the Cuenta de Garantía Solidaria for an increase in the minimum pension.

To address the health emergency, US$1,508 million was allocated to the Program of Direct Monetary Transfers to Economically Vulnerable Households. They also contemplated covering revenue shortfalls in the 2020 General Budget generated by the pandemic and incorporating resources, which they did not specify, to the 2021 General Budget.