Brasília considers creation of “recovery law” to aid indebted states

The federal government is studying the creation of a “recovery law” for states in financial difficulty. In general, the new law would allow the renegotiation of debts, disciplining the relation with creditors and public officials. Sources heard by Valor emphasize that the measure would have to be approved by Congress and could hardly be applied in the short term. According to one source, this mechanism is already applied in the US, but the conditions for its activation are quite strict. “There, the administrator loses practically all the capacity to manage the state.”

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