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He
told a dinner of Brazilian state governors in Brasilia late on
Tuesday that he wished to find a solution as soon as possible to
the mounting debt burden of regional governments, according to
the person, who requested anonymity to speak freely about the
matter.
The person said the refinancing of 20 billion reais of that
amount is "just a step away" and could be finalized by September
because of legislation that facilitates the renegotiation of
state liabilities with the bank.
The remaining amount may depend on an executive decree, said the
person. Temer's office did not immediately comment.
Several states have struggled to pay salaries for police and
doctors and to keep hospitals stocked with medical supplies.
Their finances have been squeezed by a steep decline in
commodity prices, a prolonged recession and years of budget
mismanagement.
Since taking office a year ago, Temer has offered states some
debt relief without undermining his vow to narrow a record high
budget deficit.
Still, economists such as Insper professor Marcos Lisboa warned
Temer could water down his austerity plan to drum up political
support as the president faces a corruption probe.
(Writing by Guillermo Parra-Bernal; Editing by W Simon)
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