Rio State Government Out of Money for Olympics

(ATR) Acting State Governor Francisco Dornelles today declared a "public state of calamity in financial management" for Rio de Janeiro.

Dornelles made the declaration in an effort to appeal to the relevant authorities to provide financial assistance to the state because it is unable to "honor its commitments" to hold the Rio 2016 Olympics.

"Considering [the economic crisis] has been causing severe difficulties in the provision of essential public services and could even cause the total breakdown in public security, health, education, mobility and environmental management," Dornelles wrote in his decree.

"The events have importance and worldwide impact, where any institutional destabilization would imply a risk to the image of the country's most difficult recovery."

A spokesperson for the Rio 2016 Olympics told Around the Ringsthe declaration would in no way affect the organizing committee's Games preparations because the committee does not receive government funding. The spokesperson added that all of the state's commitments for the Games have been delivered.

Rio de Janeiro state has been hit especially hard by the current recession grappling Brazil due the fall in global oil prices and loss of revenue from taxation on the industry. Local media have reported how the state government has been unable to finance government services such as paying for gasoline for police vehicles in the recent weeks.

One of the biggest Olympic commitments for the state government has been the delivery of the line 4 metro expansion. To complete the project, Dornelles had to appeal personally to acting President Michel Temer to secure the final $285.6 million of funding at the last minute.

In the decree Dornelles calls on all necessary authorities to take "exceptional measures necessary for the rationalization of all essential public services," needed before and during the Olympic Games.

Dornelles took the position as acting state governor in March after Governor Luiz Fernando Pezão began treatment for non-Hodgkins lymphoma. At the time he called the finances of the state "tragic" and unlike anything he had seen in five decades of public service.

After the decree, Rio de Janeiro Mayor Eduardo Paes said in a statement that he would "like to reinforce the position of the city of Rio is of absolute comfort fiscally and financially."

"We continue to pay our obligations; salary, funding and investments are in full swing," Paes added. "I would like to remind you also that is the city of Rio is responsible for delivery of all arenas for the Games. The ‘state of calamity’ declared by the State Government will not delay the Olympic commitments made by the city of Rio."

Paes added that the areas where the city of Rio does not have any responsibilities are areas that the Federal Government is already providing assistance for the Games.

Brazilian media outlet G1reported that Dornelles and Paes travelled to Brasilia yesterday to meet with Temer to discuss a solution to the state's finances. The meeting was not reported in the official gazette of the President's office.

According to the report, Temer is set to meet with Finance Minister Henrique Meirelles in the coming days to seek out "an alternative solution to bail out Rio de Janeiro."

The 2016 Olympic Games are set to begin in 49 days in Rio de Janeiro.

Written by Aaron Bauer in Rio de Janeiro

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