Suppliers who accept discounts to get paid first

The Popular Party government on Friday approved a scheme for settling the huge backlog of unpaid bills the country’s regions and municipalities owe to suppliers. Companies and individuals willing to accept a discount on what they are owed will be given priority in the pecking order.

In practice, those accepting a haircut of the amount due would be paid even before those who have been pending payment for much longer.

The central government has given local administrations until March 15 to supply lists of individuals and companies due payment and how much is owed in each case. Thereafter, they will be required to present plans to the Finance Ministry before the end of March on how they intend to settle their debts, and to indicate what they need to ensure their financial viability, Deputy Prime Minister Soraya Sáenz de Santamaría told a news conference on Friday.

She went on to say that the central administration would provide guarantees to local administrations so that they can effect payments from May onward.

The scheme applies to bills that are dated before the start of this year. The arrangement will remain in place only until the end of December.