Southern and Southeastern State Governors Seek Economic Aid From Government

RIO DE JANEIRO, BRAZIL – The seven governors of the southern and southeastern states sent a letter to the federal government yesterday calling for measures to prevent what they describe as “economic collapse”.

The letter was drafted after a videoconference meeting held between them in the morning and, according to the governor of São Paulo, João Doria, was forwarded to the federal government on Thursday afternoon.

In addition to President Jair Bolsonaro and the Minister of Economy, Paulo Guedes, a more detailed letter is also expected to be sent to the presidents of the Chamber of Deputies, Rodrigo Maia, and the President of the Senate, Davi Alcolumbre.

In the letter, the governors say the announcements made by the federal government on March 23rd need to be improved in relation to the states and municipalities. They claim that “the data on economic activity are dramatic and the drop in the ICMS (Tax on Goods and Services) collection in April will have a severe impact on governments. Additional emergency measures need to be implemented,” they write.

Among the measures, they call for the recovery of losses from other sources in addition to the FPE or the FPM (Participation Funds of the States, Federal District and Municipalities), notably the ICMS, royalties and special participations of oil and gas exploration, because of a reduced harvest, among other factors. They further ask for the inclusion of financing for companies to pay taxes among the alternatives to be offered by the banking network.

Additional requests are the approval of a constitutional amendment with an extension of the final deadline for settlement of deferred payment agreements; suspension of payment thereof for 12 months; and suspension of debt payments to the Federal Government for 12 months.

“This is a common point to the 27 Brazilian states. A suspension is not a pardon. It is to defer the payment of a debt to give breath to the states to sustain their operations in defense of life and minimal of the economy,” Doria said.

The governors also include the approval by Congress of PLP 149 (Mansueto Plan); the suspension of monthly payments into the PASEP (Civil Servants Asset Development Program) or its settlement through local spending on health and social assistance initiatives; and the approval of a constitutional amendment to account for the expenses of inactive people in education and health.

“We have met virtually with governors of COSUD (Southern and Southeastern Consortium). The alignment between the states is crucial to fight the spread of the coronavirus. In the afternoon, we will release the governors’ letter with the conclusions and result of this meeting,” posted João Doria on twitter.