RJ debt increases by R$ 7.5 billion works Cup and Olympics

The government of Rio de Janeiro has promised that the 2014 World Cup and the 2016 Olympics will leave many legacies for the population. Not all of them are guaranteed at this point. What is already known, however, is that the two mega sporting events will leave a huge debt for the state. Today, the debt is $ 7.5 billion, equivalent to about 18% of what the government collects each year.

The value is the sum of loans agreed by the State of Rio de Janeiro to pay its commitments because of the World Cup and the Olympics. Using this money, the government will pay Rio, among other things, the reform Maracanã, the pollution of Guanabara Bay and Rio subway extension (see list below).

To date, at least six credit transactions have been settled with domestic and foreign banks for payment of shares linked to both events. All of them were authorized by legislation passed in the State Legislature, which is not to say that they have received the backing of all parliamentarians in the House.

The state deputy Marcelo Freixo (PSOL), for example, voted against increasing the debt on behalf of the State Cup and Olympics. He criticized mainly the way debts are being negotiated by the government.

"In preparation for World Cup and Olympics, what we're seeing is the race for spending public money," he told the UOL Sports. "We MPs voted to authorize a project the government from Rio to take out a loan without even knowing the terms of payment. This is absurd," he added.


Ash also noted that funds are being hired at a time when the accounts of Rio live a delicate situation. The state is one of the major recipients of royalties paid by oil companies operating in the country. The payment of royalties, however, is being discussed in court and may change at any time.

That's because Congress has passed a new law that changes the distribution of these values. With the new rule, Rio loses revenue of about $ 4 billion a year, which would reduce the ability of debt payments.

The state government does not agree with this law and has appealed to the Federal Supreme Court (Supremo Tribunal Federal) to invalidate it. An injunction recognized the right of the state on royalties. However, the final judgment has not yet occurred.

"When the new law came into force, the governor [Sergio Cabral] announced that it had cut the pay of school lunches from state schools because they had no money. Neither have a final decision on the matter and he wants to take on new debt," criticized Ash.