The Treasury expects to realize a net issuance of debt for this year of 32,500 million euros, 7.1% less (2,500 million) that the estimate of the previous year. This is a conservative strategy with respect to the 19.960 million that were issued in 2019 and maintains a buffer for possible changes in monetary policy, or for potential funding needs of the State. “The strategy is a continuation and we continue to forecast a conservative”, he has explained this Wednesday, Carlos San Basilio, secretary-general of the Treasury and International Finance in the presentation of the funding strategy of the agency to 2020.
The plan held by the Treasury have been developed on the basis of the Budgets carried over from 2018. Therefore, it is exposed to the changes, but St. Basil’s is confident that the numbers do not change when you submit the new accounts. “Our desire is that this forecast is maintained once you have approved the Budgets. The net issuance is stable with the last few years and provides budget stability,” said the secretary-general of the Treasury. In fact, has indicated that it expects that the forecast will hold, or even be reduced, something that the markets tend to receive as something positive.
MORE INFORMATION
The Junta de Andalucía asks for an urgent meeting to Montero to be able to finance itself on the markets, The State is saving 2,400 million due to the lower emissions and the fall in the cost of funding Brussels asks Spain not to spend 22,000 million, which will save interest
This prudence in the estimation leaves the Treasury with a cushion for potential funding needs. And in this sense what is of concern to the agency are not new Budgets, but the monetary policy and the autonomous communities. “The variables extrabudgetary are those that can cause deviations. Last year, there were elements that helped the net issuance was very low, but we don’t know if you are going to repeat,” he insisted Basil. These variables, which have reduced funding needs were, basically, the fall of the interest caused by the monetary policy of the ECB and the early repayment of debt of the autonomous communities with the State (5.273 million).
In case you do not reproduce this same context, the effective emission could be increased again, not something that happens from 2017. “There is a scenario of lower rates than last year, and expectations of stability, that is why we have reduced the estimate. But if you do not recurring these variables and, in addition, the ECB announces a rate increase, we place ourselves in the 30,000 million provided for”, has clarified San Basilio.
government debt
In billions of euros
gross Issuance end –
249,6
250
210
197
200
192,8
185
gross Issuance planned
150
net Issuance end
96,6
100
50
35
32,5
36,8
net Issuance planned
20
0
2012
2014
2016
2018
2020
Prev.
Source: Treasury
THE COUNTRY
government debt
In billions of euros
gross Issuance end –
249,6
250
210
197
200
192,8
185
gross Issuance planned
150
net Issuance end
100
96,6
50
35
32,5
36,8
net Issuance planned
20
0
2012
2014
2016
2018
2020
Prev.
Source: Treasury
THE COUNTRY
government debt
In billions of euros
gross Issuance end –
249,6
250
210
197
200
192,8
185
gross Issuance planned
150
net Issuance end
100
96,6
50
35
32,5
36,8
net Issuance planned
20
0
2012
2014
2016
2018
2020
Prev.
Source: the Treasury
THE COUNTRY
The new estimates, however, yes that will impact directly on the provision in two parts. On the one hand, St. Basil’s expected to give more certainty and confidence to investors. And, on the other, the loan is given for Social Security may increase over the amount that was stated in the earlier accounts of the State (13.800 million). “We have a margin in this regard for if there is a rise on the amount”, said the secretary-general of the Treasury.
In terms of the gross issuance of public debt, this will amount to the 196.504 million for this year, 6.2% less than the strategy of 2019. The Treasury expects to obtain all of the net financing through the issuance of instruments to the medium and long term. In addition, it has ensured that it will be very active in the market in the first months of the year, when there is a high demand in fixed income and emissions of individuals.
Prudence with the public debt
The forecast debt issuance comes in a contexto reduction of the public deficit, with an adjustment path that is slowed down with respect to what has been agreed with Brussels. The objective of public debt was set at 95.9% of GDP by 2019 and 94.6% for this year. “These figures are to be taken with some caution, and is still waiting for the nominal GDP in 2019”, has been clarified by St. Basil, who believes that the past year will close about 96%, without clarifying whether it will meet the forecast sent to Brussels by the Executive socialist.
What stopped black-on-white, the secretary-general of the Treasury was the commitment of the new Government with the budgetary stability. “We’re not going to break commitments with Brussels, we are a country that we have managed to combine the compliance and the requirement of budgetary stability of Brussels with enough growth to create jobs and solve unemployment,” he defended. Even so, it has been recognized that in the matter of reduction of debt, unlike the private sector, the public Authorities still have work to do.
The Green Bond, in the second half
San Basilio also announced the issuance of green bonds for the second half of the year, something that will facilitate and encourage other private actors in the market. “We think of a bond to 20 years with a format that is comparable to that of other green bonds sovereign. The goal is to reach 10,000 million in the next few years and are linked to specific projects with allocations in Budgets”, has indicated.
This is a bonus, something that is already confirmed Nadia Calviño last December, is part of the strategy of the Government of Pedro Sanchez to provide financial resources to projects that benefit the environment. Something that is certified and monitored by a third party, as explained by St. Basil.
