Op-ed: ICO credit to pay down debt to service providers

Many companies that have endured the first years of the crisis with an adequate structure and healthy balance sheets have started to face problems due to a weakened national Treasury, which is behind on payments to services provided for regional governments and town councils.

The national Government is proposing opening 15 billion euros of eleven-month notes from the Institúto de Crédito Oficial (ICO) so that Public Administrations can pay down debt to their service providers. This money will only be allocated to paying bills that are currently pending with companies.

The issue is that similar lines of credit have not worked in the past due to short payment terms and high interest rates. The fine print will determine the success or failure of the measure.