Brazil's Haddad says government aims to pass state debt renegotiation bill this month
Adds further comments from minister in paragraph 4, context in paragraphs 5-8
BRASILIA, July 3 (Reuters) -Brazil's Finance Minister Fernando Haddad said on Wednesday that the government aims to present and approve a bill to renegotiate state debts with the federal government before the July parliamentary recess.
Speaking at a meeting broadcast from the presidential palace, Haddad said the details of this debt renegotiation are being discussed. Plans are to grant interest discounts on the debt and create a temporary equalization fund.
He added that this fund would be composed of some of the resources saved from debt service payments and distributed according to parameters to reduce regional inequalities.
According to Haddad, the proposal also includes obligations in return from the states, which he did not specify.
In March, his ministry proposed reducing the burden of states' debt to the federal government conditioned to the allocation of saved resources to technical high school education.
However, some states argued that the ideal solution would be to broaden the resource use scope to include investments in infrastructure and public security.
Several governors have requested lower debt charges, arguing that the amount paid in interest is excessively high and hampers investment.
According to the finance ministry, states owe the federal government around 740 billion reais ($132.69 billion), with four states - Sao Paulo, Rio de Janeiro, Rio Grande do Sul, and Minas Gerais - accounting for 90% of the total debt.
($1 = 5.5769 reais)
Reporting by Marcela Ayres, Editing by Franklin Paul
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