Inconsistency with the Constitution, entering into conflict with the principle of non-regression and the right to health, as well as the obvious opposition to the protection of the right to health and the sustainability of social security. These are some of the reasons cited by the Constitutional Court (US) for passing a judgment that is not favorable to the Regulation on economic urgency for the balance, organization and transparency of public finances.

On September 5, President Guillermo Lasso sent this project to the organization. The executive power, among other points, proposed reforms to the Organic Code of Planning and Public Finance and sought to update and reform the processes that enable the operation, management, monitoring and control of the National Public Finance System.

Pensioners from IESS held a protest in Guayaquil to cancel the interest on the debt that the state holds with the social security

Added to this was the issue that caused concern among retirees of the Ecuadorian Institute of Social Security (IESS), who claimed that the project sought to prevent the state from paying insurance interest, in violation of their rights, as well as retirees and people with catastrophic illnesses.

In its opinion, the entity points out that this is incompatible with Article 148 of the Constitution, which states that until the appointment of the National Assembly, the executive power can – with the positive opinion of the Constitutional Court – pass decrees on economic laws. urgency, which may be granted or waived by the legislature; However, the Constitutional Court indicates that this project cannot be considered economically urgent.

According to the organization, after reviewing the project, among its arguments, the Presidency of the Republic “failed to demonstrate the urgency of the draft Organic Regulation-law on economic urgency for the balance, organization and transparency of public finances.” , every time he was not able to convincingly justify that the measures were proposed in the draft legal regulation to examine have a plausible connection and are limited to the plausible circumstances described by the Executive.”

Furthermore, “he also did not present sufficient and convincing reasons to prove that the provisions of the draft law can immediately enter into force before the appointment of the new composition of the National Assembly.”

In its assessment, the Constitutional Court also warns that it has determined that the proposal for a regulation of the law was carried out during the previous constitutional review could have certain tensions with constitutional norms and principles; especially with the principle of non-regression and the right to health.

The Constitutional Court rejected the decree of the public finance law presented by Lasso

Progressivity and non-regression

The Constitutional Court points out that Article 4 of the project, which refers to the form of incremental calculation of examined budget advances, “could come into conflict with the principle of progressivity and non-regression of rights guaranteed by Article 11, paragraphs 4 and 8 of the Constitution; as well as the eighteenth and twenty-second transitional provisions of the Constitution”.

Paragraph 4 of Article 11 of the Constitution states: “No legal norm can limit the content of constitutional rights or guarantees.”

And section 8 states: “The content of the right will be developed gradually through regulations, case law and public policies. The state will create and guarantee the necessary conditions for its full recognition and realization. Any act or omission of a regressive nature that unjustifiably reduces, impairs or cancels the exercise of rights will be unconstitutional.”

Health and social security

The Constitutional Court also concluded that Articles 11, 28 and 39 of the proposed legal regulation are in conflict with the right to health and the principle of sustainability of social security.

In Article 39, it is indicated that the following text be included as the thirty-fifth transitional provision: “Interest earned by the contributions retained by the State until liquidation for the payment of contributions of 40% of pensions from the entry into force of the Constitution of the Republic, with the Ecuadorian Social Security Institute which until the date of issue these decrees are awaiting payment, they will be redeemed in full.

In Article 28, the Executive Power requested that the following be added: “The governing body of public finances must include in the proforma of the general state budget the mandatory state contribution for health benefits to the IESS as determined by the Social Security Act.” For recognition and award, IESS must present the results of external audits aligned with the guidelines issued by the competent public health institution.”

Pensioners presented ‘amicus curiae’ against the decree of the law on public finances

In this context, the Constitutional Court points out that the removal of claims from IESS without any technical justification directly impairs its sustainability, contrary to Article 368 of the Constitution, which stipulates: “The social security system shall include public entities, regulations, policies, resources, services and benefits of social security, and will act on the basis of sustainability criteria”, for which Article 39 of the project is “obviously unconstitutional”.

With this rejection of the project for the balance, organization and transparency of public finances, the rejected projects from seven sent by the executive power increased to four, previously they were attraction, promotion of investments for productive development; that of financial support in favor of co-activated users of educational loans, scholarships and financial aid; and business restructuring.

And only three received a positive opinion on the tax reform; project to keep the reverse tax on plastic bottles in place and the latest, for the bill on risk and disaster management, but the latter in part.