The «National Law of Commitment to Fiscal and Monetary Stability» proposal, which arose from the Council of Mayors, includes a set of legal mechanisms aimed at ensuring budgetary financial balance and avoiding deficits in the National Administration. The initiative aims to prevent the central government, as well as the provinces and municipalities, from exceeding expenditures in order not to jeopardize the fiscal result. It also provides for penalties for officials who commit such malfeasance and for officials at the Central Bank who breach the monetary emission rule that guarantees equilibrium. The central points considered by Agencia Noticias Argentina are as follows: 1 - Fiscal rules and budget execution Title I of the legal proposal establishes strict guidelines on the «Financial Result», stating that «The General Budget of the National Administration must project a balanced or surplus financial result». It is explicitly «prohibited to sanction a general budget law that contemplates a deficit financial result». During the execution phase, an «Adjustment Mechanism» is foreseen. If budget execution shows a «decrease in planned resources or an increase in expenses over original estimates that puts at risk compliance with the established rule», the Chief of Cabinet of Ministers is empowered to «adopt the necessary measures to restore said balance», prior to the presentation of a Sustainability Report. Adjustments or reductions of items must be made, «in the first place, with respect to those that are not subject by law to a minimum execution amount». Additionally, spending discipline is reinforced: «no official of the National Public Administration may assume payment commitments or execute, authorize, increase or modify expenses that are not authorized in the current general budget law or that lack the duly accredited resources for their financing». Likewise, the National Executive Branch must «refrain from requesting temporary advances from the Central Bank with the object of financing primary spending». 2 - Budgetary discipline in Congress To control the fiscal impact of legislative initiatives, a «Medium-Term Budget Impact Report» is introduced. This report is required as a «prerequisite for its treatment in committees» for «any bill that implies expenditures of any nature, originates or modifies expenses, or affects the resources of the National Public Sector». The report must contain «the estimation of the fiscal impact of the measure and the explicit identification of the source of resources or the reduction of expenses necessary to maintain consistency with the fiscal rule of Financial Result». Furthermore, a «Deferred Validity» rule is implemented for laws on spending not contemplated: «any law that establishes or authorizes expenses not contemplated in the general budget will begin to apply once the corresponding items are expressly included in the general budget law for the fiscal year following its sanction». The exception applies when the law «guarantees its financing through the allocation of concrete, specific, current, and sufficient resources, without affecting the balanced or surplus financial result». 3 - Nullity and criminal sanctions The legal proposal establishes direct and criminal penalties for the non-compliance of fiscal rules: • Nullity: «any rule dictated in violation of the provisions established in this Title shall be null, of absolute and inexcusable nullity». • Criminal Penalty for Irregular Spending: It is proposed to incorporate into the Penal Code the figure of the official who violates fiscal rules, punishing with «a prison sentence of one to six years and absolute disqualification» the «public official who, in violation of the fiscal rules established in the Law of National Commitment for Fiscal and Monetary Stability, dictates, approves, authorizes or executes norms or administrative acts that modify or increase public spending contemplated in the General Budget of the National Administration without having the duly accredited and provided resources for its financing». • Criminal Penalty for Irregular Issuance: It is also proposed «a prison sentence of three to 10 years and absolute disqualification» for the «public official of the Central Bank who orders, authorizes or executes the issuance of legal tender currency in violation of the prohibitions and rules established in its Organic Charter».
