President Hipólito Mejía said his government will not honor two Spanish loans. The payment of a RD$74.6 million loan disbursed by Matachana S.A., a Spanish firm to the Comedores Económicos (low cost meals served) and another for RD$58 million to the Inposdom (post office) by Sociedad de Desarrollo Postal, also of Spain are disputed by the government on grounds of illegalities in their procedures. The legal consultant said these disbursements are illegal, as international loans need congressional approval. Temistocles Montas, former Technical Secretary of the Presidency when the loans were disbursed, defends the correct procedures saying that Resolution 399-98 of Congress approved the Programa de Marco de Cooperación Financiera Dominico-Hispano, the legal framework which provided for the financing of different projects for US$200 million. The agreement was between the government of Spain and the government of the Dominican Republic. The president of the Senate, Ramón Alburquerque now also concurs that the loans required specific congressional approval and not an umbrella treatment.
