Brazil’s Rio state seeks emergency funding ahead of Olympics
(CNN) — Just under 50 days before the Olympics, Rio de Janeiro’s state governor has issued an executive order declaring a state of emergency that authorizes additional funding to fulfill obligations during the games.
A severe economic crisis has prevented the state from “honoring its commitments to the organization of the Olympic and Paralympic Games,” reads the order, released in the official government gazette Friday.
The crisis has been “causing severe difficulties in the provision of essential public services and can even cause a total breakdown in public security, health, education, mobility and environmental management,” the order reads.
Though the order is meant to open the door for more funding for the Olympics, scheduled to run August 5-21, it did not specify where the additional money would come from or how much would be needed.
The city of Rio de Janeiro — not the state — is largely responsible for the Olympics. But the state is responsible for certain expenditures, including a yet-to-be-completed extension of a Metro line that is meant to connect the largest of four Olympic venue clusters with the rest of the host city.
The state’s declaration will have no negative impact on the games, Rio 2016 organizing committee spokesman Mario Andrada said, according to the state-run news outlet Agencia Brasil.
“The games, they are guaranteed and will happen,” Andrada said.
Worst recession since the 1930s
For months, Brazil has been struggling with its worst recession since the 1930s. The country’s economy, the largest in Latin America, shrank 5.4% in the first quarter of this year, according to government figures. The oil-rich state of Rio de Janeiro has been especially hit by falling commodity prices.
Acting Gov. Francisco Dornelles told reporters Friday that money allocated through the state of emergency would go to security, mobility and health care.
Agencia Brasil quoted the governor as saying that the low price of oil played a role.
“I want all the people of Rio de Janeiro to understand that the state is experiencing a major financial crisis,” Dornelles said, according to Agencia Brasil. “There was a problem in the oil sector; there was a problem of economic recession, with our steel industry, with our automotive sector.
“We lost a large collection from the ICMS [tax on circulation of goods and services]; we lost a lot of royalties from oil; and this public emergency measure has aimed to draw attention of every citizen to the financial difficulties experienced by the state. ”
Andrada, the Rio 2016 spokesman, said the declaration might help the state receive federal funds.
“The Metro (extension) is not ready, and the state has said repeatedly that it needs resources. I think everyone realizes that the decree is likely to pave the way for the state to get these resources [from the federal government],” Andrada said, according to Agencia Brasil.
On Twitter, the mayor of the city of Rio de Janeiro, Eduardo Paes, seemed to distance the city from the state’s move.
Paes tweeted that Rio was in “absolute fiscal and financial comfort.”
Pointing out that the city is responsible for the arenas and legacy projects for the Olympic Games, he said most of those have been delivered.
“The state of calamity decreed by the state government in no way delays the deliveries of Olympic commitments made in Rio,” Paes tweeted. “Besides, on the issues of security, where the mayor’s office is not responsible, we are certain the partnership with the federal government will work. Therefore, I renew here the confidence that we will hold exceptional Games!”
The governor’s order ends a week that saw Thomas Bach, president of the International Olympic Committee, meet with Brazil’s Interim President Michel Temer in Rio de Janeiro. Both men confirmed that preparations were on track for the opening ceremonies on August 5.
Temer said this week that the federal government is willing to assist the state government, but he did not offer specifics.
CNN’s Shasta Darlington contributed to this report.