Thursday, 16 July 2020

Minister of Finance: ‘The Mortgage Is Killing Us’

The Ministro de Hacienda, Rodrigo Chaves, defends the need borrow to invest in public works; is in favor of lifting bank secrecy in Costa Rica

In an interview with La Nación, the Minister of Finance (Ministro de Hacienda), Rodrigo Chaves, answers why his diagnosis of public debt differs from that projected by the Central Bank and explains the handling of Eurobonds money.

Rodrigo Chaves, Minister of Finance.

In addition, he defends the need to borrow to invest in public works amid a deficit situation and criticizes the creation of specific destinations that tie public finances.

What would happen if the debt exceeds 70% of GDP?

- paying the bills -

The first thing we have to understand as Costa Ricans and the Legislative Assembly, the Executive, the business sector and the people of this country is that, if we do nothing, this year we will surpass 60% of the debt to GDP.

“And that will mean that the budgets of future years limit the growth of total spending, both current spending and capital spending. And that is not going to be good for the country, because it will slow the economy too quickly. It is very good for the country because it limits the explosion in which we were debt-GDP.

That means that there is less investment, less confidence, less consumption, and we could get into a vicious cycle of deceleration until we reach a crisis. Hopefully not”.

In the latter part of the interview, Chaves was asked about bank secrecy.

Why the idea of lifting bank secrecy?

- paying the bills -

“Bank secrecy sounds very scary,” replied Chaves.

The minister explained that in 153 countries bank secrecy does not exist. “What is the difference? The privacy of knowing how much money a person has in the bank and the privacy of knowing how much the house in which you live is worth. Philosophically speaking, it is an asset, you can convert your cash in the bank into properties, you can convert it into vehicles …there is no privacy to know how much your car is worth, your home … but in money, yes, and look, the G20, the OECD, declared 2019 the year of the end of bank secrets.”

On the subject of bank secrecy, the bankers oppose total opening of customer information.

The Asociación Bancaria Costarricense (Costa Rican Banking Association) expressed its opposition to the proposal of the Minister to lift bank secrecy as one of the measures to reduce tax evasion.

Read the full interview (in Spanish) here.

 

- paying the bills --

 

Rico
Ricohttp://www.theqmedia.com
"Rico" is the crazy mind behind the Q media websites, a series of online magazines where everything is Q! In these times of new normal, stay at home. Stay safe. Stay healthy.

Related Articles

President Alvarado defends lifting bank secrecy, that “it does not affect honest people”

President Carlos Alvarado said earlier this week that lifting bank secrecy...

Who is affected by the lifting of bank secrecy?

The decision of the Ministry of Finance to once again discuss...

MOST READ

McDonald’s donates ¢20 million in food to law enforcement officers

More than 5,000 police officers will benefit from the donation of ¢20 million colones in food by Arcos Dorados, the company that operates...

Rodrigo Marin: “O paramos la fiesta o nos lleva p…”

(QCOSTARICA) The director of Health Surveillance, Rodrigo Marín, wrote a forceful phrase on his social networks this Thursday after the exponential increase in cases...

Fuerza y Luz will suspend public attention in branches from Monday

As of Monday, July 13, the Compañía Nacional de Fuerza y Luz (CNFL), light and power utility, branches will remain closed to the...

‘It is cruel to say that this virus is invented’

(QCOSTARICA) "Irresponsible and of no solidarity". This is how Dr. Daniel Salas, Minister of Health, described the messages that question the existence of the...

During first months of the pandemic AyA only read 3,000 of 370,000 water meters in the GAM

(QCOSTARICA) During the first months of the pandemic (March and April), the 62 officials of the AyA (water utility) charged with reading water meters...

COVID-19 deaths in Costa Rica climb to 25

(QCOSTARICA) Two deaths by COVID-19 were recorded on Wednesday, July 8, for an accumulated total of 25. Death 24 was announced at the noon presser...

Let's Keep This Going!

To be updated with all the latest news and information about Costa Rica and Latin America.