STF: Union and Rio have 30 days to reconcile public debt

The Federal Supreme Court (STF) set, this Wednesday (30), a deadline of 30 days for the government of Rio de Janeiro and the Union to present conciliation proposals on the payment of the state’s public debt.

The deadline was defined during a conciliation hearing called by Minister Dias Toffoli, rapporteur of the action that deals with the case.

The conciliation was determined after the suspension of the fine imposed by the Union on the state government for failure to pay installments of the debt arising from the Tax Recovery Regime (RRF), signed in 2021.

After participating in the hearing, governor Cláudio Castro (PL) said he wants to discuss the interest paid by Rio and the possibility of a discount on debt payment.

According to Castro, over the years, the state has been harmed by federal laws that have had a negative impact on state accounts. The current debt is R$196 billion.

“Every time the debt is extended, it goes back to the first years, which are harmful to the debtor. So, Rio always ended up suffering because it never leaves the initial years to go to the middle and final years, which are the years in which the installment starts at a reasonable value. Rio only paid interest”, he stated.

The governor also stated that he does not want debt forgiveness, but fair payment of installments.

“I could ask for the debt to be completely cancelled, but I think it’s a very bad sign. The debtor has to pay his debt, but pay it in a fair way. What we are demanding here is that this payment is fair and balanced”, he added.

Recovery

The Fiscal Recovery Regime, created by Complementary Law 159 of 2017, allows states in a situation of fiscal imbalance to have benefits, such as the relaxation of fiscal rules, the granting of credit operations and the possibility of suspending debt payment.

On the other hand, the federation units must adopt institutional reforms that allow the restructuring of the fiscal balance, such as the approval of a spending ceiling, the creation of supplementary pensions and the equalization of the rules of the Private Social Security Regime (RPPS), in which applicable to the rules of Union employees.

The state of Rio de Janeiro requested entry into the regime in 2017.

A new RRF was created by the Union in January 2021. Rio de Janeiro, unable to balance its accounts in the previous RRF, applied to join the new regime in May of that year, but its plan would only be approved in June of last year .

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