Ministerial Committee on Economic Policy decides that central government guarantees will not be granted for loans being transferred to wellbeing services counties

NordenBladet — On 1 March 2022, the Ministerial Committee on Economic Policy decided that central government guarantees will not be granted for the loans and other commitments that will be transferred to the wellbeing services counties as a result of the health and social services reform.Furthermore, this policy sets out that central government guarantees will not, as a rule, be granted for new loans taken out by wellbeing services counties.On 18 January 2022, the Financial Supervisory Authority updated its regulations so that receivables from wellbeing services counties will be classified on the balance sheets of banks in the same zero-risk category as receivables from the government, municipalities and joint municipal authorities. As a result, the treatment of the loans to be transferred from joint municipal authorities to wellbeing services counties will remain the same with respect to solvency requirements despite the change in debtor.In the government bill concerning the health and social services reform, the granting of government guarantees for transferring loans was expressly justified by the fact that the guarantees would ensure that the loans remain in the zero-risk category in the reform. As the Financial Supervisory Authority’s interpretation is that the loans are zero risk even without government guarantees, there are no longer grounds for granting them.If some creditors decide to exercise their right to terminate transferring loans due to the change in debtor, the State will refinance them through its own funding.