The Supreme Federal Court (STF) has received a request from the city government to suspend installments of the BNDES debt, which totals R$1,400,000. The minister announced the decision that the funds be used for coronavirus response efforts.
The debt of the municipality of Rio de Janeiro to the Union through the BNDES (National Bank for Economic and Social Development) is suspended by Minister Luiz Fux, of the Federal Supreme Court (STF).
The minister announced that the determination would be that these present resources be applied to actions related to combating the new coronavirus pandemic.
The city's installments are due between April and September. The amount is R$1,400,000 (R$563.1 million). The debts stem from contracts with the BNDES (Brazilian Development Bank) to fund various projects, including the 2014 World Cup and the 2016 Rio Olympics. At the time, this sparked a major political debate in the country, particularly regarding how these resources were being allocated and whether this was the country's true priority. And now, the response comes in a vehement response to our completely underserved public health systems.
"It cannot be forgotten that Covid-19 containment measures consist of public policies whose implementation requires budgetary resources. These resources must be guaranteed with the utmost urgency, justifying, on an exceptional basis, the intervention of this Court," Fux said in the decision.
On the 25th, the city hall informed the Court that it is unable to honor payments at this time due to the measures it has been taking to combat the disease.
"In this case, judicial abstention would undoubtedly result in the Municipality of Rio de Janeiro worsening an unprecedented financial crisis, as well as, ultimately, the loss of more human lives due to COVID-19. This unintended consequence can be mitigated by this judicial ruling," the minister added.
For more, access.