BRASILIA (Reuters) – Brazil's finance ministry is expected to present a proposal as a middle ground in discussions on debt repayments for states amid growing calls for relief, Sao Paulo governor Tarcisio de Freitas said. said Wednesday.
The governor of Brazil's most populous state says the region's debt is growing faster than the economy and the state's revenue growth, creating an “unrepayable debt.”
Freitas told reporters after a meeting with Finance Minister Fernando Haddad that the proposal will be presented to President Luiz Inácio Lula da Silva next week and will be discussed with governors after the president gives the green light.
The goal is to reach a final document within 60 days and have a bill submitted to Congress in the first half of this year, he added.
Freitas said the governors of the southern and southeastern regions have proposed to the federal government a 3% annual debt relief plan commensurate with the long-term growth of Brazil's economy.
But he stressed that the Treasury Department would come up with a different proposal and expressed confidence that the two parties would reach a “middle ground” that would allow states to make more cash available for investment without hurting the federal coffers. did.
Freitas said the regional debt is currently being fixed within a hybrid model that takes into account both the base interest rate Selic (currently 11.25% per year) and the inflation rate plus 4%.
(Reporting by Marcella Ayers; Editing by Nick McPhee)
