Ref: Public Private Partnerships
The Government [of Portugal] will:
3.1. Avoid engaging in any new PPP agreement before the completion of the reviews on existing PPPs and the legal and institutional reforms proposed (see below). [Ongoing]
3.2. Perform with the technical assistance from EC and the IMF, an initial assessment of at least the 20 most significant PPP contracts, including the major Estradas de Portugal PPPs, covering a wide range of sectors. [Q3-2011]
3.3. The Government will recruit a top tier international accounting firm to undertake a more detailed study of PPPs in consultation with INE and the Ministry of Finance. The review will identify and, where practicable, quantify major contingent liabilities and any related amounts that may be payable by the Government . It will assess the probability of any payments by Government in relation to the contingent liabilities and quantify such amounts. The study will assess the feasibility to renegotiate any PPP or concession contract to reduce the Government financial obligations. All PPPs and concession contracts will be available for these reviews. [Q4-2011]
3.4. Put in place a strengthened legal and institutional framework, within the Ministry of Finance, for assessing fiscal risks ex-ante of engaging into PPP, concessions and other public investments, as well as for monitoring their execution. The Court of Auditors (Tribunal de Contas) must be informed of this ex-ante risk assessment. Technical assistance may be provided if necessary. [Q1-2012]
3.5. Enhance the annual PPP and concessions report prepared by the Ministry of Finance in July with a comprehensive assessment of the fiscal risks stemming from PPPs and concessions. The report will provide information and analysis at sectoral level.
The annual review of PPPs and concessions should be accompanied by an analysis of credit flows channelled to PPPs through banks (loans and securities other than shares) by industry and an impact assessment on credit allocation and crowding out effects. This particular element should be done in liaison with the Bank of Portugal. [Q2-2012]
- Include PPPs in the monthly reporting of commitments and arrears of Public Administration (Q3-2012)
- Ensure full implementation of the Budgetary Framework Law, including art. 31 (Q3-2011)
The annual review of PPPs and concessions should be accompanied by an analysis of credit flows channelled to PPPs through banks (loans and securities other than shares) by industry and an impact assessment on credit allocation and crowding out effects. This particular element should be done in liaison with the Bank of Portugal. [Q2-2012]
- Include PPPs in the monthly reporting of commitments and arrears of Public Administration (Q3-2012)
- Ensure full implementation of the Budgetary Framework Law, including art. 31 (Q3-2011)
As intermediaries between net exporters and net importers, banks are naturally in the front lines of any Debt Crisis, be it households (subprime mortages), corporates (junk bonds) or sovereigns.
ResponderEliminarThe difference this time, compared to earlier Latin American Debt crisis for example, is that there has been no creditor stand-still. Thus the original creditors have used their political and market power to repass their exposures on to oficial creditors, the ECB through bank refinancing and secondary market bond purchases and and Central Banks through the TARGET system, and their respctive taxpayers. These new ECB and Central Bank exposures to the net borrrowing countries are a direct reflection of the need to finance nte net exports of the net surplus countries and to repay existing debt.
This “nationalization” of the intra-Eurozone cross-border exposure has certainly increased the burden for European taxpayers but has yet to provide any real Debt relief to the net borrowers in Greece and Portugal.
Since the Euro taxpayers are being asked to bear the costs of excessive lending, a better solution would be to use such taxpayer funds to provide interest rate subsidies to bridge the gap between the returns required by investors and the interest rates that would be sustainable from the perspective of the borrowers, but only for truly long term direct exposure (20+ years).