Governors of cash-strapped Brazilian states on Thursday will demand President Michel Temer relax the terms of an austerity pact announced last week aimed at closing their yawning budget deficits, Wellington Dias, governor of Piaui, told Reuters. Disagreements between the federal and state governments over the austerity deal to assuage their financial woes has raised fears of a full-blown crisis that could stoke a recession already threatening to stretch into a third year.
Dias, a member of the opposition Workers' Party who heads a forum that represents all governors, accused the government of trying to impose harsh measures in exchange for revenues from an asset repatriation amnesty that states are entitled to. To salvage the deal, billed last week as a national pact, Dias said governors will propose measures to limit spending and cut pension deficits in Thursday's meeting with Temer.
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