Olympics not to blame for Brazil financial crisis – mayor

RIO DE JANEIRO, Brazil – Rio’s mayor insisted Tuesday, June 21, that the upcoming Olympic Games being hosted by his city were not at fault for Brazil’s disastrous economy.

Stressing that his city’s finances were doing well in stark contrast with those of Rio state and Brazil at large, Mayor Eduardo Paes said: “If Rio state is in crisis, it’s not the fault of the Games. It’s in crisis because it’s in crisis for other reasons.”

Last week, Rio state authorities declared a “state of public calamity” over a major budget crisis in order to release emergency funds to finance the Games, due to begin in August.

The city is financially responsible for 93.5% Olympic construction. The regional government pays for the other 6.5%, and provides the needed electricity.

“We pay our civil servants on time, we are reducing our debt, we keep our investment pledges. City hall is doing just fine, and the Olympic Games too,” he said in a speech.

The city government has largely managed to stay afloat thanks to heavy reliance on using private funds to pay for Olympics-related projects.

“The city of Rio is confronting social problems, problems of inequality and violence, we’re a country in crisis, but we don’t use the Games to justify crises and problems,” he said.

Security is a major concern, with the state’s military police tasked with keeping order in a city plagued by violence.

The federal government meanwhile offered to provide 2.9 billion reais ($850,000) to “support Rio state in public safety expenses for the Olympic Games and the Paralympic Games.”

For years, Rio city and state have been ruled by the same party – interim president Michel Temer’s PMDB, a party at the heart of the massive Petrobras corruption scandal.

Temer has announced a freeze until the end of the year on the debt that the country’s 27 states owe the federal government.

Rio state has projected a 19 billion reais ($5.6 billion) deficit for this year due in part to a drop in oil prices that has hit the royalties it was due to receive.

Teachers have been on strike since early March. They and other state officials are being paid late, while retirees are not receiving pension payments on time.

The state government has already put in place an austerity plan, removing five ministries and two social programs. – Rappler.com