Exceptional solutions to redress the failure to pay suppliers by local entities (Royal Decree Law 4/2012)

Royal Decree Law 4/2012 of 24 February, which determines the information obligations and necessary proceedings to establish a funding mechanism for payment to providers of local entities (Official Gazette of 25 February) establishes an exceptional payment mechanism for the payment and cancellation of debts to suppliers of local entities and its funding.
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This mechanism and its implementation through the “immediate adoption of urgent and extraordinary measures”, is justified by the “pressing” (often desperate) situation in which there is a lack of liquidity with regard to these companies due to the payment delays by local entities, and the “low efficiency” (absolute ineffectiveness) of the provisions agreed in recent years for this purpose (modifications in the debt claim procedure established in the Public Sector Contracts Law for debt claimed to the Administration, indebtedness special operation and guarantee line from ICO).