Brazilian president promises help to state administrations

 Brazilian President Michel Temer said on Thursday that he will not leave state governments hanging, and the federal government will discuss transfers to states individually.

The statement was made one day after the president enforced a partial veto to a bill which authorized the transfer of federal resources to states in need. Temer alleged the veto prevented elevated fiscal risk to the federal administration.

According to him, the federal government will negotiate with states possible compensations the states can give in order to receive resources. "That does not mean we will abandon states," he said.

Several Brazilian states are on the brink of bankruptcy. Rio de Janeiro state, for example, declared a state of financial calamity just before the Olympic Games, which were held in August, and is now struggling to pay the wages of state workers.

Rio Grande do Sul state and Minas Gerais state are also facing severe financial problems. The partial veto Temer enforced affects specifically the federal help to those states in a more serious situation.

Temer also said the government will work on a tax reform in 2017, after presenting a proposal for a social security reform and a labor reform in late 2016. Both reforms are controversial, and critics say they will be inefficient in ensuring fiscal solvency, while making things harder for more vulnerable groups of the population.

source: Xinhua