Ecuador issues decrees to alleviate debts of university students and businessmen

Ecuadorian President William Lassoissued two decrees to alleviate the debts maintained by university students and businessmen facing financial problems, especially as a result of natural phenomena such as the coronavirus pandemic covid-19 and the El Niño weather phenomenon.

Both decrees, which have been signed on Friday, have the nature of economic urgency and must pass the review of the Constitutional Court, due to the absence of the National Assembly (Parliament), dissolved by Lasso last May.

The Communication Secretariat of the Presidency reported this Saturday that the texts have already been sent to the Constitutional Court and specified that it is the Decree Law on Financial Support in favor of Co-activated Beneficiaries of Educational Loans, Scholarships and Economic Aid; and the Business Restructuring Decree Law.

The first decree seeks to alleviate the financial burden of students who for some reason face coercive processes due to problems in paying their educational loans.

The measure aims to eliminate one hundred percent of the interest, fines and surcharges generated by overdue obligations or by payment agreements in educational loans and financial aid.

Likewise, it seeks to improve the credit rating of users by eliminating the reporting of coercive operations, and will apply a six-month grace period for the payment of debts to unemployed students.

He also indicated that the benefit of “total or partial forgiveness of credit” to those who have some degree of disability or suffer from rare or catastrophic diseases.

Regarding the Business Restructuring decree, the Communications Secretariat indicated that this initiative “determines the regulatory mechanisms so that companies facing financial difficulties can reach agreements with their creditors and restructure their organization in order to maintain their operation and functioning”.

The project considered the economic effects caused by the COVID-19 pandemic in industries, as well as, among other factors, the impact that the El Niño phenomenon could generate, which is expected to affect the country with storms in the last quarter of anus.

“This proposal will contribute to maintaining a healthy economyencourage investment, protect creditors and preserve the jobs”the source added.

He recalled that commercial companies controlled by the Superintendence of Companies, including branches of foreign companies located in the country, could “avail themselves of the administrative restructuring procedure established in this decree.”

However, he explained that the decree will allow companies that were declared unviable to undergo a process of “prompt and orderly dissolution and liquidation”.

The announcement of the two new executive decree-laws took place in the midst of the extraordinary presidential and legislative election process scheduled for next August 20, and which are derived from the mechanism of “cross death” applied last May by President Lasso.

With this measure, the president dissolved Parliament, shortened his term, called early elections and ensured the power to exercise the remainder of his position through emergency law decrees on economic matters.

The president invoked this constitutional mechanism at a time when the National Legislative Assembly, with an opposition majority, was preparing to vote on a motion for his eventual dismissal, due to a complaint of alleged corruption in a state company.

The authorities elected in the elections on August 20 will complete the 2021-2025 period that corresponded to Lasso, but which was interrupted by the “death cross”.

Source: EFE