Brazil’s federal government yesterday froze Rio de Janeiro state’s accounts and ordered it to repay millions of dollars in arrears.
Rio de Janeiro boasts one of the biggest fiscal imbalances of all of Brazil’s states.
In July it predicted a deficit of 19bn reais (almost $6bn) and had to be bailed out by the federal government, which now says the state owes it $53m.
The Rio Times has reported that following the protests the state court authorised a delay to a government plan to increase social security deductions from public servants’ salaries or pensions to 30% of their total wages. State officials said they would appeal.
State government chief of staff Leonardo Espíndola said: “The measures, although difficult, are fundamental and necessary for us to emerge from the crisis and the state of uncertainty that our finances are currently in. With the measures we want to avoid the state of Rio de Janeiro from falling into social collapse.”
Other measures imposed by state governor Luiz Fernando Pezão include freezing wage increases for public safety personnel and state auditors.
