Treasury will reward fiscally responsible states and municipalities

The National Treasury will hold public hearings starting this week on a new rating system for states and municipalities, which will reward those that carried out reforms to improve their long-term fiscal situation.

The Treasury secretary, Ana Paula Vescovi, told Valor that the consultation will last one month and the rule will come into force already in 2017. She advanced that the Treasury will offer guarantees to as much as R$17 billion in loans and also authorize R$3 billion more in unsecured loans to the local governments.

Brazil Finance Ministry reviewing R$20bn in loans for states, cities

The Finance Ministry is reviewing R$20 billion in loan requests from states and cities. Domestic financing represents R$4.5 billion of the total, while US$3.9 billion are foreign loans. States need federal clearance to borrow R$16.4 billion of the total, according to a Valor survey of National Treasury data. Governors have been criticizing the Finance Ministry for holding back the loans, which they consider crucial for financing several projects. The ministry says it is developing new policies to evaluate the loans. “The approval of huge credit transactions for sub-national entities in the last few years has proven unsustainable in the new economic scenario,” the ministry says.

valor.com.br 11/19/15
Waldemar Jezler