Treasury notes issued by the Correa administration must be considered debt, says expert

11 de Julio de 2018 - 12:23

Crespo indicated that the Ministry of Finance issues treasury notes to cover liquidity needs with an expiry date of less than 359 days; however, when it exceeds this period of time, as in this case, the right thing to do was to issue bonds.

Quito, July 11 (Andes) .-  Ramiro Crespo, supervisor supporting the Comptroller’s Office’s public debt audit affirmed that treasury notes issued by the government of Rafael Correa must be considered as debt.

“(Treasury notes) must be considered as debt (…). It’s everything the State has to pay for and even more what it has to pay sooner,” he said during an interview with state-owned radio.

The analyst referred to Comptroller Pablo Celi’s accusation of the mismanagement of treasury notes during the previous administration which indicates evidence of criminal responsibility against former president Correa and other senior officials for declaring this type of documents reserved.

Celi said that operations with treasury notes could amount to 1.7 billion and 2.3 billion dollars.

Crespo indicated that the Ministry of Finance issues treasury notes to cover liquidity needs with an expiry date of less than 359 days; however, when it exceeds this period of time, as in this case, the right thing to do was to issue bonds.

He explained that instead of paying cash and then issuing a new note, the previous administration “paid treasury notes with another treasury note.” In addition, they rolled over bonds without having treasury notes be paid. This is therefore considered indebtedness.

Additionally, treasury notes were issued to make payments to municipalities and universities. “Treasury notes could not be used in lieu of payment,” he ratified.

He criticized the fact that operations with treasury notes had been declared as secret and explained that in this case, it is supposed to be debt but it is not counted as such because those instruments expire at a short-term.

According to him, the management of operations with treasury notes is the result of trying to hide that the debt exceeded the 40% of the Gross Domestic Product (GDP), the debt limit established in the Planning and Public Finance Code.

He added that such situation cannot be considered individually but as part of a context which, among other elements, includes the 1218 decree which consolidates the social security’s debt “which is our money not the State’s.”

Crespo added that the report handed by the Comptroller’s Office last April contains exclusion on the lack of officials’ cooperation to hand in documents claiming that the debt is reserved until expiry.

He added that the previous administration did not request the National Assembly’s permission to exceed the debt ceiling probably to hide the real situation of the Ecuadorian economy.

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/dj

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