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Thursday, June 30, 2022

So much for “facts only”: Economist Masten tore up the KUL programme, and then the SD party and their understanding of the liquidity scheme!

By: Nina Žoher

After the respected economist, Igor Masten, Ph.D., criticised part of the programme of the Constitutional Arch Coalition (Koalicija ustavnega loka – referred to as KUL) which talks about the liquidity scheme, the SD party decided to defend the programme. Through the “fact-checking” platform, they pointed out that Masten clearly did not understand the possibility of a European aid framework, and even less so the examples of good practice, with which the other European countries had provided affordable aid for the companies. Masten responded to the SD party’s criticism and stressed that the KUL liquidity scheme is not feasible.

“Through the #FactsOnly, the SD party is wondering whether my criticism regarding the KUL liquidity scheme not being feasible is true. The answer is – yes, it is true: the KUL liquidity scheme is not feasible,” said Igor Masten, Ph.D., adding that they did not actually provide all the facts. According to Masten, Article 27 of the EU’s temporary framework stipulates that guaranteed loans can have a maximum of 90 percent state coverage, a maximum of 6 years and a guaranteed premium of at least the amount specified in Article 27a. Article. “Item 27b. allows for deviations that are being misinterpreted by the SD party.”

 “Article 27b states that loans may have a duration of more than 6 years if they have a lower margin and/or a higher risk premium. However, KUL is proposing a longer coverage, maximum coverage (90 percent) and an interest rate that is lower than the lowest allowed credit risk premium,” Masten pointed out, adding that simple financial logic will tell you that this does not work, not with us, and not with the European Commission. He reiterated that the KUL liquidity scheme proposal is not “cool” in view of the temporary framework of permitted COVID measures, approved by the European Commission. So much for “facts only,” Masten criticised SD’s response.

Let us recap. “Everyone has the right to their own opinion, but not to their own facts,” the Social Democrats wrote on the party’s official website. In the second half of November, they launched a platform for verifying the “facts,” on which they continue to justify their theft of Moskovič’s villa, where they are based; deny responsibility for the heavily overpaid TEŠ 6 project, and so on. They also emphasise, among other things, that Nova24TV is not a media outlet for them, but a propaganda tool and weapon. The SD party is apparently very afraid of the disintegration of the media monopoly, which is threatened by Nova24TV.

They are faking ignorance when it comes to understanding what liability to banks means
According to Masten, the other arguments made by the SD party are just as senseless. “Filling the holes in a non-thought-out scheme. Contradictions such as the transfer of the implementation of the scheme to banks (which is already the case), and only one online application at the SID Bank, where loans would be automatically approved. So, what exactly are the banks doing here? How would you allocate the loans for the individual banks through this one application? By drawing winners? But will the loans be forced on them if, given the interest rate that does not cover the minimum price for the guarantee, they would not even cover the costs of giving out such a loan?” he pointed out and emphasised that they are faking ignorance when it comes to understanding what liability to banks means

Masten goes on to explain that providing services to banks or operational aid does not mean taking over loan commitments. “It’s not a matter of semantics, but of functional literacy. Let’s face it – someone simply wrote something without thinking about it.” He emphasised that he was pleased that with the use of their “fact checker” they had found out that the direct conversion of receivables into capital was not in accordance with the law, as the debtor also had several other options. “The point is: the SD party can certainly prepare a better, and above all, a more sensible proposal on its own. Spending their energy trying to defend someone who quickly threw together a text makes no sense. Instead, I suggest you surprise me with a better one,” Masten added.

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