Fiscal recovery: biannual assessment by the Ministry of Finance approves fiscal adjustment in GO and RS, but disapproves in RJ

Established in 2017, the regime seeks to assist states and the Federal District that, at some point, encounter a serious fiscal imbalance. Claudia Vasconcelos Silva, professor of Economic Sciences and Accounting at Universidade Presbiteriana Mackenzie, explains that joining the regime is a way for states with high debt to gain momentum to pay their debts.

“You can enter this recovery regime, trying to take a breather even in relation to the Union, so that you can negotiate and pay these debts.”

States that adhere to the RRF can enjoy some benefits, such as the relaxation of fiscal rules, the granting of credit operations and the possibility of suspending debt payments. In return, they must carry out a series of reforms to readjust public accounts, such as the adoption of a spending cap, the creation of supplementary pensions and the equality of the rules of the Own Social Security Regime (RPPS) with the rules for Union employees.

Through a Fiscal Recovery Plan, the state must demonstrate that it will be able to rebalance public accounts within nine years. Since the beginning of the regime, Goiás, Rio de Janeiro and Rio Grande do Sul have had their plans approved. Minas Gerais had the accession plan accepted and is now preparing the recovery plan.

According to the Ministry of Finance, the performance of Goiás, in the last semester, for example, was classified with grade A. This means that the state government complied with the fiscal adjustment measures within the deadlines and forms foreseen in the recovery plan itself, as well as complying with the law that created the RRF.

During this period, according to the agency, Goiás did not grant raises or readjustments to state public servants; did not create a position that would imply an increase in expenses; did not create or increase aid of any nature; and did not institute mandatory ongoing expenses, among others.

The note granted by the Ministry of Finance indicates that the state’s accounts are heading in a good direction, says Vasconcelos. “They are managing, through what was proposed to them, to achieve their fiscal targets. That’s why they received this positive evaluation note.”

The implementation of measures related to the regime is monitored by a Supervisory Board. It is made up of members from the respective state, the Ministry of Economy and the Federal Audit Court, the TCU.

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