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COVID-19: Federal aid to states and municipalities adds up to $17.4 bi

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Brazilian President Jair Bolsonaro today (Mar. 24) held another two video conferences with state governors from the South and the Central-West to brief them on the aid measures aimed at the states the government is implementing to tackle the effects of the COVID-19 pandemic assailing the country. Bolsonaro and his team of federal officials also heard requests and assessed local needs.

“[Infrastructure] Minister Tarcísio [Freitas] expressed real concern over a shortage of supplies stemming from poorly coordinated measures at state and municipal level. Transport plans must cover distribution logistics for over 10 million initial kits for COVID-19 testing,” Bolsonaro tweeted, regarding one of the topics discussed in the conferences.

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The president also reported that a new meeting will take place tomorrow (25) with health secretaries from states throughout the country and Health Minister Henrique Mandetta on shared guidelines to cope with the new coronavirus.

Yesterday, Bolsonaro and cabinet ministers held two video conferences, one with Northeast governors and another with governors from the North. After the meetings, the government announces a series of cooperation measures for states and municipalities to combat the COVID-19 pandemic. According to the Economy Minister, a $17.4 billion package is made up of a number of actions including the transfer of resources and financing lines.

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The main strategies include halting the payment of $2.48 billion installments of debt owed by the states to the federal government and the federal government’s restitution of $3.15 billion in the funds under the share earmarked for states and municipalities to compensate for the losses brought about by reduced tax collection.

Rio Grande do Sul Governor Eduardo Leite also requested the federal government to cover the payments of the debt owed by the states to international agencies, like the Inter-American Development Bank. “[I request] that that financing deals forged by the state government be settled by the federal government, and this negative balance be incorporated into the state debt owed to the federal government,” he declared.

He pointed out that the states facing financial difficulties—Rio Grande do Sul, Minas Gerais, Rio de Janeiro, and Goiás—no longer pay their installments for the debt with the federal government, either because they have subscribed to the fiscal recovery regime or due to a court ruling (temporarily suspending payments), and need the measures unveiled yesterday to be expanded.

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