New financial aid funds for Spanish regions and local governments

Automatic summary, not yet reviewed

1. Two new funds are created, one for the autonomous communities and one for local entities, to lend them money when they have liquidity problems. Each fund is divided into compartments with different conditions depending on each administration's situation.
2. The fund for autonomous communities has four compartments: Facilidad Financiera, for those meeting their fiscal targets; Fondo de Liquidez Autonómico, for those with difficulties; Fondo Social; and a fund in liquidation for supplier payments. Those meeting targets get better terms and do not need an adjustment plan.
3. The Fondo Social is created so that autonomous communities can pay debts outstanding as of December 31, 2014 to local governments under agreements and transfers related to social spending, such as education, health care and social services.
4. If an autonomous community fails to pay a local government under social spending agreements, the State can withhold resources from its funding system and pay the local government directly with that money.
5. The fund for local entities has three compartments: Fondo de Ordenación, for municipalities in financial risk or that pay suppliers late, with demanding conditions such as spending cuts and local tax increases; Fondo de Impulso Económico, for healthy municipalities wanting to finance investments; and a fund in liquidation for supplier payments.
6. A public electronic register is created where all agreements between autonomous communities and local governments involving payments must be recorded. If an agreement is not registered, it can be terminated and resources cannot be withheld to pay its debts.
7. The deadline for releasing the dividendo digital, the television frequency band that will be used for 4G mobile services, is extended to March 31, 2015, because nearly 50% of affected buildings had not adapted their antennas. Telecom operators will be compensated with extra days on their licenses.
8. Other measures: the flat rate of social security contributions for permanent contracts is extended for three months, local entities may defer repayment of the 2013 tax settlement over ten years, and the State assumes the cost of certain fuel tax refunds following a European court ruling.

Who it affects

• Autonomous communities: They can request funding from the new funds; those meeting targets get better terms, while those failing them face adjustment plans and possible withholding of resources.
• Municipalities and other local entities: Municipalities with problems can access the Fondo de Ordenación under demanding fiscal conditions; healthy ones can finance investments through the Fondo de Impulso Económico.
• Television viewers: They have more time, until March 31, 2015, to adapt the antennas in their buildings and avoid losing TV channels due to the frequency change.
• Businesses: Those signing permanent contracts between January 1 and March 31, 2015 can continue benefiting from reduced social security contributions.
• Unemployed people doing community work for public administrations: Those already doing social collaboration work may continue until they finish receiving their unemployment benefits.

Words worth knowing

Liquidez (liquidity)

Money available to pay current debts and expenses.

Plan de ajuste (adjustment plan)

A set of spending cuts and revenue measures an administration must follow to receive financial help from the State.

Dividendo digital (digital dividend)

The television frequency band (790 to 862 MHz) being freed up for 4G mobile communications.

Convenio (agreement)

A contract signed between two public administrations, for example between an autonomous community and a municipality, to provide services or assume payments.

Retención de recursos (withholding of resources)

The State deducts money from payments an administration is due to receive in order to pay its debts directly.

It summarizes the law as published in the BOE. It is written by artificial intelligence and may contain mistakes: the official text is what counts. Read the official text · How we make summaries