THE Chief Minister and Financial Secretary of the Gibraltar Government agreed to extend the flexible £500 million ‘revolving’loan with Natwest Bank for three more years.
Called a ‘revolving facility agreement’, it allows the government to ‘draw down or withdraw, repay and withdraw again’, according to the Investopedia website.
The government said in 2020 when they signed the agreement that the flexible loan was aimed at paying for pandemic costs, restarting the economy and infrastructure investments.
The agreement was backed by the UK Government ‘sovereign credit rating’ and was supposed to end in 2024.
“I warmly welcome the support for Gibraltar that this sovereign guarantee represents,” said Chief Minister Fabian Picardo in November 2020.
“I want to specifically thank the Prime Minister, the Chancellor and the Foreign Secretary for their understanding and support in these difficult times.”
Picardo said the UK backing was a testament to the ‘exceptional relationship’ Gibraltar had built with the UK.
He boasted how it would provide ‘additional firepower at much reduced rates’ and was ‘a massive show of support from the UK’.
Government ministers laid a copy of the agreement before Parliament.
Fears of Gibraltar’s economy struggling with the two-pronged assault from the pandemic and Brexit were thoroughly allayed by a confidence-boosting budget this July.
It showed an upswing in fortunes for the Rock with a reduced deficit and upbeat predictions about economic recovery.
And Picardo denied the GSD Opposition claim it was ‘hopeless fiction’ by boasting that the government has ended up £44 million better off on average than estimates showed.
“All of the data shows the opposite,” he said in Parliament on July 18.
“There is every reason to believe we will exceed our surpluses.”
He was referring to this financial year’s predicted £2.5 million surplus, announced as part of last week’s budget debate.