Spanish government will deduct some taxes that it fave before to the city councils if these institutions don’t arrange the operations of debts to pay their providers or if they don’t fulfil the ones that they agree each other.
BOE (Spanish Oficial Report) published yesterday the law that the cabinet passed on Friday. It establishes the obligation of information for a funding mechanism. In this mechanism the creditors who accept a deduction will have priority in the cashing.
This operation will transfer to the Spanish State the rights of local entities in its participation on the taxes of the State ‘in the necesary quantity to face the payment obligations’.
Apart from the providers that accept a reduction the payments that are demanded in the Justice Court before the first of January 2012 will become priority too. The most ancient debts will become priority too. The city councils will send to Treasury Department before de 15th of March, a relation of its obligation that they have to pay yet.
Erik Rios Salazar