Rio State Officials Seek Aid from Private Banks

By Lise Alves, Senior Contributing Reporter

SÃO PAULO, BRAZIL – With Rio de Janeiro facing one of its worst financial crises ever, state finance secretary, Gustavo Barbosa, met on Monday (November 14th) with representatives of several banks in São Paulo to see if he could find a solution to late wage payments. The federal government has stated that it would not aid the state until its R$170 million debt with the Union is paid.

“I am here in São Paulo to try to obtain extraordinary resources,” said Barbosa during a TV interview on Monday.

According to Agencia Brasil, until last Friday (November 11th), only 62 percent of the state’s payroll had been paid. The remaining current employees and retirees are expected to receive their wages receive in seven installments starting on Wednesday. Only active and inactive employees of the security area and working teachers were fully paid their earnings this month.

The Rio government released on Monday a statement to the press with statements by secretary Barbosa stating that if unscheduled resources are received by the state, payments may be anticipated.

On Wednesday (November 15th), Rio’s Legislative Assembly will discuss the state government’s project to cut costs, extinguish social programs, postpone readjustments and increase social security contribution of public servers to thirty percent for the next sixteen months. The measures sparked violent protests last week with demonstrators storming the Legislative Assembly building.

On Monday, Supreme Court Chief Justice, Carmen Lucia Rocha, rejected an appeal which would halt the increased social security contribution quota for active and inactive state employees as proposed by Rio’s governor Luiz Fernando Pezão.

Brazil’s Finance Minister, Henrique Meirelles, said last week that although Rio is facing financial difficulties, it is not the only state in the nation experiencing financial problems.

“There are other states also in very difficult situations. The situation in Rio is the most dramatic, but we have to look at the situation of all states. We can not take individual measures,” said the minister to reporters.