With renegotiation, Rio should receive R$ 5 billion in relief.
Interim President Michel Temer and Finance Minister Henrique Meirelles will propose, at Monday's meeting (20) with governors, a grace period of ten months for the total amount of installments to the states; a proposal of this kind would give immediate relief of at least R$ 5 billion to Rio de Janeiro, led by Francisco Dornelles (photo), and around R$ 30 billion to all units of the federation; the unpaid amounts will be accumulated in the debt stock.
Rio 247 - Interim President Michel Temer and Finance Minister Henrique Meirelles will propose, at Monday's meeting (20) with governors, a grace period for the total amount of installments for ten months to the states. A proposal of this kind would give an immediate relief of at least R$ 5 billion to Rio de Janeiro and around R$ 30 billion to all units of the federation. The unpaid amounts will be accumulated in the debt stock.
The new proposal from the economic team should serve as an ace up the government's sleeve, since the states have already signaled that they are not willing to accept what is on the table and was offered by the Treasury about ten days ago: an initial 100% discount on installments that decreases linearly, month by month, for 18 months.
For the states of Rio de Janeiro, Rio Grande do Sul, and Minas Gerais, which are facing a severe financial crisis, the grace period may be insufficient to resolve their cash flow problems. As a consequence, these states are likely to push for a separate solution, similar to the R$2,9 billion bailout for Rio de Janeiro. Other states are also likely to press for the government to consider the specific circumstances of each state, in addition to debt renegotiation.