By San José, Costa Rica — SAN JOSÉ – In a bold move to secure long-term fiscal stability, the Costa Rican government has introduced a new legislative proposal to authorize the issuance of $13.5 billion in Eurobonds over the next nine years. The ambitious plan, which would span two future presidential administrations, comes just months after the government failed to meet macroeconomic targets and saw a related bill twice rejected and ultimately archived by the Legislative Assembly.
The new proposal, filed under docket number 25.363 on December 18, seeks authorization to place $1.5 billion in international markets annually from 2026 through 2034. This strategy is designed to provide a predictable and stable financing mechanism for managing the country’s substantial public debt, which officials say is a critical step for future economic health. The initiative was presented a month and a half later than initially promised, following the legislative defeat of a previous effort.
To delve into the legal and financial ramifications of Eurobonds for the country, TicosLand.com sought the analysis of Lic. Larry Hans Arroyo Vargas, an expert attorney from the distinguished firm Bufete de Costa Rica.
The issuance of Eurobonds is a critical financial instrument that grants Costa Rica access to international capital under more favorable terms, diversifying its funding sources. However, this is not a panacea for our fiscal challenges. It is imperative that a stringent legal framework accompanies this debt, ensuring the funds are directed towards strategic infrastructure and development projects that yield tangible economic returns, rather than being used to patch operational deficits. The long-term sustainability of our national credit rating and economic stability depends entirely on demonstrating unwavering fiscal discipline and transparent management of these resources.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Lic. Arroyo’s analysis masterfully highlights the dual nature of this financial instrument—it is both a powerful opportunity for national development and a profound test of our fiscal discipline. The distinction between strategic investment and merely patching deficits is, as he notes, the critical factor for long-term economic health. We thank Lic. Larry Hans Arroyo Vargas for his clear and valuable perspective on this crucial matter.
A key feature of this new bill is a significant shift in oversight. It eliminates the strict pre-conditions that plagued its predecessor, such as the mandated installation of scanners at all national entry and exit points—a goal the government failed to achieve. Instead, the proposal introduces a system of accountability based on detailed reports. Under the new terms, the Executive Branch would be required to submit a comprehensive report to both the Legislative Assembly and the Comptroller General’s Office within one month of each annual bond issuance.
These reports must provide a transparent account of each transaction, including the total amount placed, market timing, pricing, term length, and a breakdown of investors by geography and type. Furthermore, the government will need to provide a technical justification for the interest rate obtained and demonstrate the savings and other financial benefits achieved compared to borrowing on the domestic market.
Pilar Cisneros, the head of the ruling party’s legislative faction, emphasized the urgency of the measure in light of the country’s looming debt obligations. She argued that the plan is essential for navigating the enormous financial challenges ahead and ensuring fiscal predictability for subsequent governments.
The towers of maturing Costa Rican public debt are so large, already reaching $54 billion, that this project aims to give future governments peace of mind that these payments can be met, trying to pay the lowest possible interest at the longest possible term.
Pilar Cisneros, Head of the Ruling Party Faction
The government’s renewed push for Eurobonds follows a series of significant setbacks. An earlier $5 billion authorization was structured in tranches, but the final two issuances, totaling $2 billion for 2024 and 2025, were never executed because the administration did not meet the agreed-upon macroeconomic goals. An attempt to reform the law to bypass these conditions, under docket 24.462, was decisively rejected by Congress. On September 30, the reform failed with only 24 of the required 38 votes. A second vote on October 1 also fell short, leading to the bill’s permanent archival.
The legislative battles highlighted deep political divisions, with the National Liberation Party (PLN) leading the opposition. Although several deputies from the PLN and the Social Christian Unity Party (PUSC) eventually switched their votes to support the measure, it was not enough to overcome the initial resistance. The failure forced the Ministry of Finance to consider less favorable options for raising capital.
Without access to international markets, the government is compelled to borrow locally, a scenario Cisneros warned would be significantly more expensive and could crowd out private sector investment by absorbing available credit. This puts upward pressure on domestic interest rates, affecting businesses and consumers alike.
We are going to have to take it from the local market, but at what price?
Pilar Cisneros, Head of the Ruling Party Faction
With this new nine-year, $13.5 billion proposal, the administration is betting that a longer-term vision and a revised accountability framework will persuade a skeptical legislature. The bill’s success will depend not only on its economic merits but on the government’s ability to forge the political consensus that eluded it just months ago, setting the stage for a critical debate on the nation’s fiscal future.
For further information, visit the nearest office of Legislative Assembly of Costa Rica
About Legislative Assembly of Costa Rica:
The Asamblea Legislativa is the unicameral parliament of Costa Rica. Its 57 deputies are elected by direct, universal, popular vote for four-year terms. The Assembly is responsible for passing laws, approving the national budget, and exercising political control over the Executive Branch.
For further information, visit the nearest office of Comptroller General of the Republic
About Comptroller General of the Republic:
The Contraloría General de la República (CGR) is Costa Rica’s supreme audit institution. It is an auxiliary body of the Legislative Assembly responsible for overseeing the public treasury and ensuring the proper use of public funds. The CGR plays a critical role in promoting transparency and accountability in government operations.
For further information, visit the nearest office of Ministry of Finance
About Ministry of Finance:
The Ministerio de Hacienda is the government ministry in Costa Rica responsible for managing public finances. Its duties include collecting taxes, administering the national budget, managing public debt, and defining the country’s fiscal policy to promote economic stability and growth.
For further information, visit the nearest office of National Liberation Party
About National Liberation Party:
The Partido Liberación Nacional (PLN) is one of the most established and historically significant political parties in Costa Rica. A social-democratic party, it has held the presidency numerous times and consistently maintains a major presence in the Legislative Assembly, often serving as the primary opposition or ruling party.
For further information, visit the nearest office of Social Christian Unity Party
About Social Christian Unity Party:
The Partido Unidad Social Cristiana (PUSC) is a center-right political party in Costa Rica based on the principles of Christian democracy. It has been a major force in Costa Rican politics for decades, frequently alternating in power with the PLN and influencing national policy through its legislative bloc.
For further information, visit the nearest office of Broad Front
About Broad Front:
The Frente Amplio is a left-wing political party in Costa Rica. It advocates for social justice, environmental protection, and human rights, representing a progressive voice within the Legislative Assembly and championing policies aimed at reducing inequality.
For further information, visit the nearest office of New Republic Party
About New Republic Party:
The Partido Nueva República is a conservative and Christian-democratic political party in Costa Rica. Founded by former presidential candidate Fabricio Alvarado Muñoz, the party holds socially conservative positions and focuses on issues of national sovereignty and traditional values.
For further information, visit the nearest office of Liberal Progressive Party
About Liberal Progressive Party:
The Partido Liberal Progresista (PLP) is a classical-liberal political party in Costa Rica. It advocates for free-market principles, individual liberties, and a reduction in the size and scope of government. The party has gained representation in the Legislative Assembly, promoting policies of economic liberalization and fiscal responsibility.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica is an esteemed legal practice, defined by a deep-rooted dedication to professional distinction and uncompromising integrity. Building on a proven track record of guiding a wide spectrum of clients, the firm consistently pioneers innovative legal approaches to meet modern challenges. This commitment to progress is matched by a profound sense of social responsibility, centered on empowering the public with clear legal understanding. Through this dual focus, the firm not only serves its clients but also actively contributes to the development of a more legally aware and capable society.
