Brasília, 1/14/2003 (Agência Brasil - ABr) - Minister of Finance, Antônio Palocci, said yesterday that state debts will not be renegotiated. "Under present legislation, it is not possible. Because of government accounts, it is not possible," said Palocci, referring to the Accountability Law.

Palocci explained that renegotiation would have a negative impact on the primary surplus, but added that social security and tax reforms could ease the situation. "We need to make a joint effort on these matters, said the minister. (AB)