Brazil freezes Rio’s accounts over unpaid debt

AFP, RIO DE JANEIRO: The Brazilian government froze Rio de Janeiro state’s bank accounts Monday, ordering the struggling state to pay up on $53 million in overdue debt.
Rio, one of the states hardest hit by a deep recession in Brazil, “is blocked from making any kind of payment until the amount it owes the state has been paid,” said the state finance secretariat.
Officials said the freeze would only apply for three days, and would not prevent the state from paying civil servants’ salaries on November 16.
Pummeled by Brazil’s worst recession in a century, Rio is nearly bankrupt, with total debt set to reach 17.5 billion reals ($5.4 billion) by the end of the year.
With tax revenues plunging, the state has had to make drastic cuts to health, security and other sensitive budget lines.
On Friday, Governor Luiz Fernando Pezao announced a package of tough austerity measures, including cuts to social programs, a tax hike for retirees, a sales tax increase and a transport fare rise.

Brazil freezes Rios accounts over unpaid debt

AFP, RIO DE JANEIRO: The Brazilian government froze Rio de Janeiro states bank accounts Monday, ordering the struggling state to pay up on $53 million in overdue debt. Rio, one of the states hardest hit by a deep recession in Brazil, is blocked from making any kind of payment until the amount it owes the state has been paid, said the state finance secretariat. Officials said the freeze would only apply for three days, and would not prevent the state from payingcivil servants salaries on November 16. Pummeled by Brazils worst recession in a century, Rio is nearly bankrupt, with total debt set to reach 17.5 billion reals ($5.4 billion) by the end of the year. With tax revenues plunging, the state has had to make drastic cuts to health, security and other sensitive budget lines. On Friday, Governor Luiz Fernando Pezao announced a package of tough austerity measures, including cuts to social programs, a tax hike for retirees, a sales tax increase and a transport fare rise.