Tarso discusses the Federal Pact at the Rio de Janeiro Bar Association.
The Governor of Rio Grande do Sul emphasized, in a lecture, that difficulties in political and financial management are a result of the crisis in the Federal Pact, which overwhelms states and municipalities with excessive commitments stipulated in the Constitution; Tarso Genro also highlighted, as a first step to unblock the country's federal issues, the importance of voting on Bill 238/2013, which changes the indexation criteria for debt refinancing contracts.
Public managers, parliamentarians, lawyers and jurists from Rio de Janeiro attended, this Monday (20), the lecture by Governor Tarso Genro on the Federal Pact and Public Debt, at an event promoted by the Brazilian Bar Association - OAB - in the capital of Rio de Janeiro.
According to Tarso, it is impossible to separate internal and external issues in the political and financial management of states. "Let's look, for example, at the situation of President François Hollande (France). He has not been able to fulfill his government program due to the constraints imposed by the global crisis and the demands of the European Central Bank," he compared.
In Brazil, according to Tarso, the difficulties stem from the crisis of the Federal Pact, which burdens states and municipalities with excessive commitments stipulated in the Constitution, but mainly due to transfers for debt repayment to the Union. In Rio Grande do Sul, the governor highlighted, resources for investments come from external financing, since the budget does not allow for large infrastructure projects and social programs. In addition to the percentage reserved for debt, the state has over 320 public employees, of which 170 are retired.
The debaters agreed that the clauses in the contracts, signed during the FHC administration, were correct. However, the current financial reality is completely different, requiring an update of the indices. The most emblematic case is the Selic rate, which at the time of the contracts was 24% and is currently at 7,5%.
PL 238 / 13
The vote on Complementary Bill 238 (PL 238/2013), which changes the indexation criteria for debt refinancing contracts, is the first step towards unlocking the country's federal issues, Tarso reminded. "The Federal Government's proposal places this situation, which is the most critical, on a new level. From this point on, things enter another level of discussion and the Federation can operate more convincingly for its maintenance," stated the governor, arguing that the National Congress needs to consider the matter as quickly as possible.
With the resolution of the debt problem, Tarso Genro stated that issues such as political and tax reforms can "move forward in a decent manner." Another consequence of the renegotiation of the Federal Pact would be "progress in the country's democratic process, with attention to the new actors in democracy, such as the new middle class," he emphasized.
Tarso argued, in his speech in Rio de Janeiro, that Rio Grande do Sul needs to advocate for a way to unblock the federal issue in Brazil. Otherwise, there will be a stalemate in which the political sphere will be swallowed up by the financial one – and all major discussions will end up being resolved by the Judiciary. The governor also mentioned the fact that the Supreme Federal Court (STF) does not consider the repercussions of its decisions on the states.
After the event at the OAB (Brazilian Bar Association) in Rio de Janeiro, the governor of Rio Grande do Sul met with the president of the Federation of Industries of Rio de Janeiro (Firjan), Eduardo Gouvêia, with whom he continued discussions on the topic of the Federal Pact.
Text: Guilherme Gomes
Photo: Caco Argemi/Piratini Palace