Zema Responds to Lula's Comments on Debt Negotiations

The governor of Minas Gerais, Romeu Zema, has publicly responded to remarks made by President Luiz Inácio Lula da Silva regarding the renegotiation of state debts with the federal government. The exchange occurred during a recent event on January 22, where Lula mentioned that he might deserve a token of gratitude from Zema for supporting legislation aimed at addressing the financial obligations of states.

During the ceremony for the concession contract of BR-381 in Minas Gerais, Lula suggested that the assistance provided to states struggling with debt was a feat that only a figure like Jesus Christ could achieve if he were to run for the presidency.

In a counter-response, Zema took to social media to articulate his view on the matter. He emphasized that while the state intends to meet its financial commitments, he believes that fair treatment should be afforded to those contributing to the nation's development. Zema stated that Jesus Christ would not impose exorbitant interest rates on individuals who support the construction of Brazil.

Zema's statement specifically referred to the Programa de Pleno Pagamento de Dívidas dos Estados (Propag), which facilitates the renegotiation of over R$ 760 billion in debts owed by various states to the national government. This initiative was recently sanctioned but faced 13 vetoes from Lula.

Notably, a significant portion of these debts--approximately 90%--is concentrated among just four states: Goiás, Minas Gerais, Rio de Janeiro, and Rio Grande do Sul. The Propag program outlines a framework for states to repay their debts over a period of up to 30 years, linked to the Índice de Preços ao Consumidor Amplo (IPCA) index, which is currently set at 4.5% annually, in addition to a variable interest rate ranging between 2% and 4%, based on the contractual agreement. In contrast, under existing arrangements, states face an interest rate of 4% plus either the IPCA or the Selic rate, which currently stands at 12.25% annually.

This ongoing dialogue highlights the complexities surrounding debt management at the state level and the contrasting viewpoints of state and federal officials regarding fiscal responsibility and support for economic growth.