Brazil’s Rio state seeks emergency funding ahead of Olympics

Updated 12:52 AM EDT, Sat June 18, 2016
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(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. “