The Treasury and Public Finance Secretary Luis Videgaray acknowledged approval to Congress of the Financial Discipline Law, with the purpose to regulate and control the debt of states and municipalities.
Following the adoption of the initiative sent in to the legislature last August by President Enrique Peña Nieto, the finance secretary said that with this new law the public finances of the states and municipalities will be strengthened, promoting the efficient and orderly use of public spending and contracting debt and obligations.
Videgaray also said that approval of the audit, accountability and transparency of the use of public residuals is encouraged, but above all, the Fiscal Discipline Law provides for penalties for local public servants who do not manage their financing responsibly.
The three main objective of this new law are establishing rules for financial discipline, contracting and recording debt; reducing the costs of debt contracted by state and municipal governments; moderating the level of indebtedness of such agencies and other local public bodies.
New tools are provided for these functions, among which the implementation of an alert system for mediating debt levels, creating a record of the obligations for institutions to acquire a debt and have the federal endorsement to reduce the costs of public debt.
In a statement, Videgaray said that the new law respects autonomy of states and municipalities, and also directly benefits the citizens, as medium and long-term deadlines lake will see an increase in public investment, and with that, levels of social welfare.