Brazil’s National Treasury and state development bank BNDES are in talks to abate multimullion dollar debts that are eroding government fiscal accounts, two sources with knowledge of the matter said on Tuesday.
In the last couple of years, President Dilma Rousseff has delayed payments worth around 26.5 billion reais ($6.8 billion) to the BNDES related to massive disbursements of subsidized loans to local companies to boost capital spending.
That debt, as well as others the government holds with state banks that financed the payment of social programs while revenues plummeted, is at the heart of a case against Rousseff that could lead to her impeachment. The total debt of the so-called accounting tricks amounts to between 35 billion reais and 40 billion reais, analysts say.
Under terms of the cross-debt deal, BNDES could opt for the early repayment of 26.5 billion reais in long-term debt owed to the Treasury and, in exchange, the government could use that money to honor the arrears, the two sources said.
Brazil Energy Insight 
Leave a comment