Cosud governors ask for debt interest negotiation – 03/02/2024 – Market

In search of relief in public accounts, governors of the South and Southeast regions will again plead with the federal government to renegotiate the states’ debt with the Union, they announced this Saturday (2) at the end of the Cosud (Consortium for the Integration of States of the South and Southeast of Brazil) in Porto Alegre.

Concerned about the debt “garrote”, as the governor of Rio de Janeiro, Cláudio Castro (PL), called it, the seven heads of Executive will concentrate their efforts with the Minister of Finance Fernando Haddad in search of measures such as compensation for losses of the States by the Union and the indexation of interest for the debt stock in a fixed amount of 3%.

“If you add up the payments made by the states and make comparisons with the debt, only vulture funds around the world have had this profitability,” says Castro. “Either we have effective measures, or month after month we continue to bleed with installments.”

“We have been drying out ice”, complained the governor of Minas Gerais, Romeu Zema (Novo). “On average, the debt grows 10% per year, and the state’s revenue follows the economy, with growth of 2% per year on average. We can’t resolve it in two years, we have to resolve it now.”

The expectation is that these measures will facilitate management conditions on the part of states that are under the Fiscal Recovery Regime (RRF). Of the seven states that make up Cosud, three joined the RRF: MG, RJ and RS.

“A person who has cancer undergoes chemotherapy, chemotherapy saves them from cancer, but it makes the person very ill. RRF is chemotherapy,” said Castro. According to him, 80% of federal revenue is made in the same states that owe 93% of the debt to it. “We will help the country much more if we are able to invest,” he says. “[O RRF] It’s making us die,” he said.

For the governor of SP, Tarcísio de Freitas (Repulicanos), the resumption of investment capacity in the South and Southeast helps Brazil. “If we are compressed and can’t grow, it’s because there’s a lack of investment. And we need that valve, a breather. Looking at the debt issue is good for everyone, it’s good for the central government.”

According to the governor of RS, Eduardo Leite (PSDB), the meeting between the representatives continued the already existing dialogue with the federal government. “Last year we held meetings with Minister Haddad, he demonstrates understanding and sensitivity regarding the issue of debt. The dialogue has been consistent and constant, we now need to take effective steps.”

These steps include reviewing the amortization of the outstanding balance and contractual charges, which penalize the execution of public policies, they stated.

Leite and Castro gave São Paulo as an example, which, although it has not joined the RRF, allocates around R$21 billion per year to pay the debt. “One metro line per year that costs the debt paid to the Union”, said the governor of Rio Grande do Sul.

The governors also demanded from the National Congress more transparency and predictability when approving expenses that burden the States, such as minimum salaries for professional categories.

Cosud ended this Saturday with the presence of Tarcísio, Castro, Zema, Leite and the governor of Paraná, Ratinho Júnior. The governor of Espírito Santo, Renato Casagrande (PSB), returned to Espírito Santo on Friday night (1). The governor of SC, Jorginho Mello (PL), did not attend, citing health reasons.

Although they demanded more action from the federal government, the tone of the statements was conciliatory, avoiding controversy.

The most incisive criticisms were made by Zema, who called the efforts of the Lula government base to question the labor reform and the sanitation framework “regrettable” and recalled the president’s criticism of the Central Bank’s autonomy.

“A president who starts to control the Central Bank is a president who will not be concerned about the currency, but rather about his next election. And all of this only contributes to creating an environment of insecurity, instability and mainly a lack of credibility”, said Romeu Zema, calling these actions a “shower of cold water” for investors.

In addition to the economic agenda, public security was the main topic of the Cosud meeting, with a focus on the repression of organized crime.

In a letter read at the end of the event, the governors requested changes to criminal and penal legislation, such as the review of requirements for granting provisional release in custody hearings in cases of serious crimes, in addition to the definition of well-founded suspicion in the police approach to provide security. legal status to agents.

On the environmental agenda, the group called for the definitive implementation of the Atlantic Forest Fund, the main biome in the Southeast and South regions, which has been provided for by law since 2008.

A partnership was also established to plant conservation seedlings, and the creation of a group focusing on renewable energy and energy transition.

In the area of ​​health, Rio Grande do Sul state secretary Arita Bergmann said she hopes that the first collective purchases of medicines will be celebrated at the next edition of the Cosud meeting, which will take place in August in Espírito Santo.

Arita and Governor Eduardo Leite asked for the renegotiation of epidemiological guidelines and the updating of the criteria for distributing federal resources to combat dengue.

Among other points defended by Cosud’s 21 working groups are the maintenance of the secondary education model implemented in 2017, the creation of integrated Human Rights observatories and the adoption of an anti-racist pact by the consortium.