Connect with us

Government

Spain to Guarantee Catalonia Creditor Payments After Referendum

Published

on

Catalonia
  • Spain to Guarantee Catalonia Creditor Payments After Referendum

Lenders who may be holding their breath over Spain’s secessionist upheaval can sleep calmly.

The central government will guarantee payment to all creditors of the Catalan regional administration, according to a Budget Ministry official. Regardless of Catalan separatists’ attempts to hold an illegal referendum for independence on Sunday and possibly declare independence from Spain, the ministry will make sure banks, suppliers and civil servants keep getting paid on time, the official said.

The assurance is important to keep Spain’s largest regional economy running smoothly while it services its more than 75 billion euros ($88 billion) in debt. Continuity is crucial to the major rating companies, because Spain ultimately guarantees the debt of all of its 17 regions. On Friday, S&P Global Ratings is due to consider its sovereign rating.

The Catalan government that’s seeking its own sovereignty oversees an economy comprising one-fifth of the nation’s total output. It has given itself a 48-hour deadline to declare a republic if a “Yes” vote wins on Sunday, although regional officials have given somewhat contradictory statements on the threat over the past few days.

Disputes over taxes and debt lie close to the heart of the years-long tussle between Catalan separatists, based in the semi-autonomous region governed from Barcelona, and the central government in Madrid, 315 miles away in the country’s heartland.

This month the national Budget Ministry took control of payments away from Catalan authorities after they stopped providing weekly spending reports. The move makes it easier for Madrid to stop public money from being used for a vote that’s been ruled unconstitutional.

Despite the budget intervention, Catalan authorities in fact are cooperating with authorities in Madrid to ensure all legitimate payments are made, the ministry official said Thursday. The exceptional controls will stay in place for as long as the Catalan administration continues to defy the law, the official added.

The Catalan’s own tax agency in Barcelona this year asked to become an intermediary between local taxpayers and the central government tax authority, promising to reimburse taxpayers for any fines incurred if the money wasn’t duly forwarded to Madrid.

Should any of those tax payments be withheld, the central authority will go after those taxpayers directly, the ministry official said.

Despite the political turbulence, markets have taken calm view. The yield spread between Spain’s 10-year benchmark bonds over similarly dated bunds was at 115 basis points on Friday at 11:20 in London, compared with its six-month average close of 118 basis points, as the nation extends a four-year economic recovery, and the European Central Bank buys more than 5 billion euros of Spanish public debt each month under a stimulus program.

The suggestion of renegotiating or walking away from debt is not new to the separatist debate. It emerged again this month when the region’s Parliament passed a law that said a newly independent Catalonia’s economic and financial obligations will be set by “the terms that are agreed” with the nation it’s leaving, rather than offering a guarantee of full payment.

That Sept. 8 law, which is a road-map for transition to a republic, was quickly suspended by the high court.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

Continue Reading
Comments

Government

Senate Suspends Senator Abdul Ningi for 3 Months Over Budget Padding Allegations

Published

on

Abdul-Ahmed-Ningi

The Senate has announced the suspension of Senator Abdul Ningi for three months following his allegations of budget padding to the tune of N3.7 trillion in the 2024 budget.

Ningi, who represents Bauchi Central and chairs the Senate Committee on Population, had made the claims in a recent interview with the Hausa service of the BBC.

During a plenary session, Senator Olamilekan Adeola, the Chairman of the Senate Committee on Appropriations, raised a motion to address Ningi’s allegations, citing the urgent need to address what he termed as “false allegations.”

The transcript of Ningi’s interview was read on the Senate floor, prompting deliberation on the appropriate action to take.

Initially, Senator Jimoh Ibrahim proposed a 12-month suspension for Ningi, but Senator Chris Ekpeyong moved to reduce it to six months.

Eventually, Senator Garba Maidoki amended the motion further, suggesting a three-month suspension.

The amended motion was put to a voice vote, and Senate President Godswill Akpabio announced the decision to suspend Ningi for three months.

Following the ruling, Ningi was escorted out of the Senate chamber by the Sergeants-at-arms.

The suspension comes amidst division within the Senate over Ningi’s claims, with some senators disowning his allegations and calling for a thorough investigation.

Continue Reading

Government

Ekiti Governor Unveils Multi-Billion Naira Relief Programmes Amid Economic Crisis

Published

on

Biodun Oyebanji

Ekiti State Governor, Mr. Biodun Abayomi Oyebanji, has announced a comprehensive relief package aimed at alleviating the hardship faced by the people of the state.

The relief programs encompass various sectors to cushion the impact of the economic downturn.

One of the key initiatives entails clearing salary arrears amounting to over N2.7 billion owed to both State and Local Government workers.

This move signifies the government’s commitment to addressing the financial burdens faced by its workforce.

Furthermore, Governor Oyebanji has approved a substantial increase of N600 million per month in the subvention of autonomous institutions, including the Judiciary and tertiary institutions.

This augmentation is intended to enable these institutions to implement wage awards in alignment with State and Local Government workers’ salaries.

In addition to addressing salary arrears, the relief programs extend to pensioners, with the approval of payments totaling N1.5 billion for two months’ pension arrears.

Moreover, an increase in the monthly gratuity payment to state pensioners and local government pensioners will provide additional financial support, totaling N200 million monthly.

The relief initiatives also encompass agricultural and small-scale business sectors.

The allocation of funds for food production and livestock transformation projects underscores the government’s commitment to enhancing food security and economic sustainability at the grassroots level.

Governor Oyebanji emphasized that these relief programs are part of the state’s concerted efforts to mitigate the adverse effects of the economic downturn and foster shared prosperity.

The comprehensive nature of the initiatives reflects a proactive approach towards addressing the challenges faced by Ekiti State residents.

Continue Reading

Government

President Tinubu Orders Immediate Settlement of N342m Electricity Bill for Presidential Villa

Published

on

power project

President Bola Tinubu has directed the prompt settlement of a N342 million outstanding electricity bill owed by the Presidential Villa to the Abuja Electricity Distribution Company (AEDC).

This move comes in response to the reconciliation of accounts between the State House Management and the AEDC.

The AEDC had earlier threatened to disconnect electricity services to the Presidential Villa and 86 Federal Government Ministries, Departments, and Agencies (MDAs) over a total outstanding debt of N47.20 billion as of December 2023.

Contrary to the initial claim by the AEDC that the State House owed N923 million in electricity bills, the Presidency clarified that the actual outstanding amount is N342.35 million.

This discrepancy underscores the importance of accurate accounting and reconciliation between entities.

In a statement signed by President Tinubu’s Special Adviser on Information and Strategy, Bayo Onanuga, the Presidency affirmed the commitment to settle the debt promptly.

Chief of Staff Femi Gbajabiamila assured that the debt would be paid to the AEDC before the end of the week.

The directive from the Presidency extends beyond the State House, as Gbajabiamila urged other MDAs to reconcile their accounts with the AEDC and settle their outstanding electricity bills.

The AEDC, on its part, issued a 10-day notice to the affected government agencies to settle their debts or face disconnection.

This development highlights the importance of financial accountability and responsible management of public utilities.

It also underscores the necessity for government entities to fulfill their financial obligations to service providers promptly, ensuring uninterrupted services and avoiding potential disruptions.

Continue Reading
Advertisement




Advertisement
Advertisement
Advertisement

Trending