President Guillermo Lasso sent two new emergency economic decree laws to the Constitutional Court (CC) on Tuesday, September 5. One, for the balance, organization and transparency of public finances and the other, Risk and Disaster Management, which intends to improve the mechanisms of public resource management and institutionalize the system of risk and disaster management, according to the Executive Board.

For analysts, the law on the regulation on risk and disaster management is more likely to receive a favorable ruling from the Constitutional Court, as it has “immediate effect”, while the public finance body, which deals with technical and more complex issues, could consider going to a debate next The National Assembly.

Guillermo Lasso will send two decree laws on risk management and public resource management to the Constitutional Court

So far, seven proposals have been sent to the Court by the President: one has been approved, three have not been approved, and there is no statement on the others yet.

What do these decrees provide?

The regulation on the law on balance, organization and transparency of public finances proposes “reforms of the Organic Code of Planning and Public Finance that will improve the management of public finances in an orderly and transparent manner, promoting the balance and sustainability of tax accounts”.

According to the document sent to the Court, the decree arose from “the need to adapt the Organic Code of Planning and Public Finance and the regulatory framework necessary for the processes established for the operation, management, monitoring and control of the National System of Public Finance in In order for the management of fiscal accounts to guarantee compliance with economic objectives, for which it is essential to update and reform the legal system in order to reflect and effectively solve the new challenges and realities facing public finances”.

While the one for risk and disaster management, “its purpose is to regulate the management of the national decentralized risk management system for the execution of actions of prevention, preparation, response, mitigation and recovery in case of emergencies and disasters.”

Likewise, it indicates that its fundamental goals are to reduce the risk of disasters and direct public management when they inevitably occur, to eliminate or reduce the consequences and losses, both human and economic.

What kind of future could they have at the Constitutional Court?

Publisher of weekly analysis, Alberto Acosta Burneo, believes that the decree law on public finances, since it is a decree that has “many technical” and “complex” issues, the Court will “probably decide not to deal with it” and ask to deal with it in detail in the next National Assemblies.

To this, economic analyst Segundo Camino Mogro adds that the Constitutional Court could claim that this regulation “does not meet the urgent criteria” in the sense that any law that strives for the sustainability of public finances is a medium- and long-term law, and not a law that seeks economic stability in the short term. deadline.

“Since it is not a law that can be implemented immediately, as was the case with the tax reform that came into force immediately, I believe that the CC has something to justify the fact that it is not urgent and could wait. that will be the position of the new Assembly”, he explains.

According to Acosta Burneo, this law seeks to modify some of the rules for managing public finances in order to free up those fiscal resources to reduce fiscal pressure. Furthermore, give greater discretion to the Ministry of Economy and Finance to change spending or tax benefits; they give you greater flexibility in borrowing; etc

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Regarding the Law on Risk and Disaster Management, both analysts believe that the executive branch will have a better chance of getting a positive response. “There is little room for the Constitutional Court to accept it and give a positive opinion, because of all the problems that will arise in connection with the El Niño phenomenon,” says Camino Mogro.

“I think it is much more consistent, so we have to see what the Court says, if it says, it could be this part yes, but this second part no, something like this could happen,” adds Acosta Burneo.

However, the publisher of Weekly analysis makes a remark that he thinks the body has doubts about giving a positive opinion on this regulation. He says that other issues are embedded, in-depth, productive and related to investments. As an example, he cites the possibility of selling beaches and bays for aquaculture, which he considers important and positive, but “they want to put that, justifying that it is urgent to get funds”, so it would be necessary to see if that argument will be accepted by the Constitutional Court.

Since last May, after President Guillermo Lasso decreed the cross of death and dissolved the National Assembly, he has sent a total of seven decree laws. Three are currently waiting for the CC’s opinion, in addition to the mentioned two, that a purchase tax was introduced on non-returnable PET plastic bottles.

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Three were rejected: to attract, encourage investment for productive development; that of financial support in favor of co-activated users of educational loans, scholarships and economic assistance; and that of Business restructuring. Only the one with tax reform.

According to Acosta Burne, the fundamental problem is the definition of economic urgency given by the Constitutional Court. “Any measure that has an immediate effect, so if any decision, any legal change, does not have an immediate effect for the Constitutional Court, is not urgent, then with this definition, most of the decrees that can be passed are eliminated from the possibility,” he assures.

Camino Mogro agrees with this opinion, adding examples such as the Law on Investments. “It was a law that (even if) the Court (issued) a positive opinion that did not mean that investments would arrive in the country the next day. The Law on Investments takes a long time. Here, it is important to determine what is urgent, whether this law can work in the short term or whether it will take several months, more than a year to have an effect”, he emphasizes.