Rio Warns of Fiscal Collapse as Brazil States Seek Debt Relief
- States ask to pay simple rather than compound interest on debt
- Supreme Court will rule on repayment method next week
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Rio de Janeiro said it’s running out of money to pay for basic services months before the Olympic Games while other Brazilian states warned of similar financial crises if the federal government doesn’t provide debt relief.
Six state governors and a representative for Rio de Janeiro said on Tuesday their fiscal woes are forcing them to make cutbacks that could lead to a breakdown of social services. Rio has been delaying payment of salaries to public servants since the beginning of the year.