“Bra­zil to help cash-strap­ped sta­tes”

Times of Suriname - - ENGELS -

BRA­ZIL - Bra­zil’s fe­deral and sta­te govern­ments ha­ve re­a­ched a deal to al­le­vi­a­te the fis­cal woes of cash-strap­ped sta­tes, the gover­nor of Rio de Jan­ei­ro, Luiz Fer­nan­do Pe­zão, said on Tues­day af­ter a mee­ting with Pre­si­dent Mi­chel Te­mer.

Pe­zão said in ex­chan­ge for fe­deral help the sta­tes are con­si­de­ring bud­get re­forms in­clu­ding a spen­ding cei­ling to sho­re up their fi­nan­ces. He did not de­tail the me­a­su­res. Vi­o­lent pro­tests against an aus­te­ri­ty pack­a­ge ha­ve rock­ed Rio’s sta­te as­sem­bly hou­se this week, high­ligh­ting the woes of Bra­zil’s third most po­pu­la­ted sta­te less than three months af­ter hos­ting the Olym­pics.

“We are star­ting a gre­at fe­deral pact to help sta­te govern­ments,” Pe­zão told reporters at the pre­si­den­ti­al pala­ce as the mee­ting con­ti­nued bet­ween Te­mer and other gover­nors. He said de­tails of the deal will be an­noun­ced la­ter by Fi­nan­ce Mi­nis­ter Hen­ri­que Mei­rel­les.

The gro­wing fi­nan­ci­al woes of Bra­zi­li­an sta­tes ha­ve ad­ded to wor­ries about the strength of a re­co­ve­ry af­ter two years of re­ces­si­on in La­tin Ame­ri­ca’s lar­gest eco­no­my.

The sta­te of Rio Gran­de do Sul ear­lier on Tues­day de­cla­red sta­te of fi­nan­ci­al ca­la­mi­ty af­ter sub­mit­ting an aus­te­ri­ty pack­a­ge to its lo­cal as­sem­bly to slash pay­rolls and sell sta­te-run com­pa­nies to co­ver its fis­cal de­fi­cit.

Te­mer is con­si­de­ring sha­ring about 5 bil­li­on re­ais ($1.5 bil­li­on) in fi­nes from an as­set am­ne­sty pro­gram with the sta­tes to help them pay man­da­to­ry year-end bo­nu­ses to ci­vil ser­vants and other ex­pen­di­tu­res.

Soa­ring pay­rolls af­ter years of fast eco­no­mic growth ad­ded pres­su­re to the fi­nan­ces of Bra­zi­li­an sta­tes that are bar­red to is­sue debt wit­hout the green light from the fe­deral govern­ment.

The Te­mer ad­mi­ni­stra­ti­on fears that an­ti-aus­te­ri­ty de­mon­stra­ti­ons in Rio de Jan­ei­ro could spread to other sta­tes and hit the po­pu­la­ri­ty of a pre­si­dent that was of­fi­ci­al­ly sworn in­to of­fi­ce less than three months ago.

Te­mer took over the pre­si­d­en­cy af­ter the Se­na­te top­pled his pre­de­ces­sor and for­mer run­ning ma­te Dilma Rous­seff on char­ges of doc­to­ring pu­blic ac­counts to co­ver a fis­cal cri­sis that has cost the coun­try its co­ve­ted in­vest­ment-gra­de ra­ting.

($1= 3.3545) (Reuters)

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