On Thursday night, in the Budget and Finance Committee, Finance Secretary Pablo Quirno said today that ANSeS's orbiting Stability Guarantee Fund will be eliminated. It will allow reduction of the total public debt by 37,185 million dollars. This is an accounting function: bonds issued by the national government – in pesos and dollars – are today in the FGS. Goes to TreasuryAnd this, upon his receipt of the said documents, will dismiss them.
Provided in mechanism Section 223 Omnibus Law Scheme. “Public debt securities consolidated in accordance with the provisions of this Act shall be transferred to an account belonging to the National Treasury, where they shall be canceled due to succession confusion.”
In this regard, the Article 226 Dice “Get rid of it Transfer of Assets of Guarantee and Stability Fund Decree 867/07 created for the National Treasury. The national executive branch shall have the power to take all actions necessary to carry out the provisions of this article.”.
What will happen if the law is approved? An asset has been deleted from FGS assets (Securities in your portfolio) and a liability in the Treasury (What he owed to FGS).
That is, in the next report issued by the Ministry of Economy, The share of debt will decrease from US$ 425,294 million (latest official data) to US$ 388,109 million.If these articles of the Bill are approved.
According to the latest official statement, today 68% of FGS assets are in public sector bonds and 17% in corporate stocks They are listed on stock exchange. One of the objectives of FGS is to finance productive activities to strengthen economic growth and create registered employment. Only 4.8% of the funds are used for “manufacturing or infrastructure projects”.. Another more or less important segment (4%) is ANSeS loans to retirees and others.
What is FGS for?
That is, FGS today essentially functions as a fund that invests in government bonds.
But what is interesting is that FGS was created to meet the needs of ANseS in case a crisis prevents payment to beneficiaries of the company. ANSeS states: “FGS can fund the following events:
•To protect the level of pension benefits in case of potential shortfalls in the funding of the public pension system.
To cancel salary adjustments and pension credits in circumstances duly established by the National Social Security Administration (ANSES) established by the Historical Compensation Act.
During these years the purchasing power of pension assets has declined by 30 to 40%, FGS He did not contribute a single penny towards pension or pension.
Quirno explained to the commission that the pesos collected regularly through ANSeS (Contributions and Contributions). It is sufficient to fund only 50% of the company's requirements To meet retirement benefits. The other half is provided by the Treasury. “The pension system has been broken for some time, and FGS Never acted as a counter-cyclical fund” Cuerno insisted.
Economist Oscar ChetrangoloA renowned expert on social security issues said Clarion He never saw the point in the creation of FGS and its existence, that was his opinion Its dissolution is perfectly justified:
“The initial mistake was when AFJP was nationalized and they reverted to the payment system. The justification for the end of the personal capitalization system was that the capital market could not keep the money needed to pay the retirees. But we reverted to the payment system and funds raised by AFJP went to ANSeS but continued to be allocated to the capital market. Over the years, it became clear that the FGS only served to place state directors In private companies and to perform some open market functions. But in between, the debt balance was artificially inflated. They lied about the loan and lied that FGS was being used to pay pensions”.
–Did FGS never deposit pesos for payment?
–I don't know if it ever was, but what I can say for sure is that the Treasury put more into pension payments than what FGS's assets are worth today.
A few months ago, before knowing the current government's plan, the economist Eduardo Levi Yeyati A similar comment was made to the newspaper La Nación: “The FGS is a device considered for other reasons, not guaranteeing the payments of the distribution system and not implying a transfer to the Treasury. Funding cost, which in no way changes pension stability. To be precise, “On consolidation of public sector accounts, public debt in the investment portfolio should be extinguished directly.”
FGS is suspected in 2022 and 2023 At the behest of the central bank, the bond market will operate To keep the prices of financial dollars in check.
In recent weeks, the stock has received the loan provided Argentina Airlines So the flag line can make the accounting makeup show a deficit rather than the actual one.
Quirno concluded his presentation to the budget committee by saying that the intra-public sector debt is equal to 37,185 million dollars. 92% of which is held by FGS and 8% is distributed among 65 companies of the national public sector.. “These 65 companies have 65 companies or decision-making bodies. They increase costs precisely because of their administrative problems and make debt management difficult. These companies have budget allocations and with their excess resources they have invested in treasury bonds. Asset consolidation, lending treasury, to the actual needs of these companies. It will allow us to adjust budget items accordingly and avoid inefficiencies.”
Regarding the shares of private companies holding FGS, Quirno pointed out: “They will go to the treasury and stay there, with no plan on what to do with the property,” he calculated. 5.5 billion dollars.
In the FGS share portfolio, participation Ternium Argentina; Bomba Holding; Southern Gas Carrier; Banco Macro and Grupo Financiero Galicia.
Quirno recalled that $5.5 billion worth of shares today would be enough for two months of expenses incurred by ANSeS for its beneficiaries.
