#TEMER'S FISCAL TAGET APROVED IN BRAZILIAN CONGRESS

#TEMER'S FISCAL TAGET APROVED IN BRAZILIAN CONGRESS

[ENGLISH VERSION]

SOURCE/LINK:http://www.bloomberg.com/news/articles/2016-05-25/temer-earns-first-win-as-brazil-congress-approves-fiscal-target

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Temer Earns First Win as Brazil Congress Approves Fiscal Target

Arnaldo Galvao and Anna Edgerton

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Brazil’s Acting President Michel Temer enjoyed his first victory in Congress on Wednesday when legislators approved his request to change this year’s budget target.

Actong Brazilian President Michel Temer on May 24.

Photographer: Evaristo Sa/AFP/Getty Images

Lawmakers in a joint session of Congress supported government legislation that allows it to post a budget gap before interest payments of 170.5 billion reais ($47.7 billion) in 2016, rather than a primary surplus as proposed by the previous administration. The Senate and lower house voted following a marathon session that ran well past midnight. The voting tally wasn’t immediately made public.

Michel Temer

Photographer: Evaristo Sa/AFP via Getty Images

Investors use Brazil’s primary budget result to gauge the country’s fiscal health and its ability to service debt. The country last year lost its investment-grade status after the three major rating companies expressed growing concern over government finances. Had lawmakers rejected the administration’s request, it would have been forced to drastically cut spending and shut down many government services in order to meet the original target of a primary surplus.

Wednesday’s win is an important signal that Temer can garner support for legislation in a Congress that until recently was stuck in gridlock amid a political crisis. He now faces the challenge of sustaining that support as he asks lawmakers to pass unpopular fiscal-austerity measures that are designed to shrink the near-record budget deficit.

For a detailed look at Brazil’s fiscal crisis, click here.

“There’s a feeling that the government does have a coalition and passed this first test in the legislative process,” said Rafael Cortez, political analyst at Tendencias Consultoria Integrada. “The hope is that it can hold on to that to approve the economic measures.”

Top Job

Temer, 75, took over Brazil’s top job less than two weeks ago on promises to unify a country that grew increasingly polarized during his predecessor Dilma Rousseff’s impeachment battle. While her supporters still denounce Temer as the architect of a coup against her government, his administration enjoys the support from many legislators who until a few months ago were loyal to Rousseff.

"Temer has averted conflict with parties that could become part of his allied base," said Thiago Vidal, a political analyst at Brazilian consulting firm Prospectiva. "The result of today’s vote was widely expected."

The acting president is betting he can pick up additional political capital if he manages to put the recession-battered economy back on track. To achieve that goal, Temer said on Tuesday he’ll ask Congress to limit subsidies and approve a cap on government spending. He also suggested he could shut down Brazil’s sovereign wealth fund and improve corporate governance at public pension funds and state-run companies.

For an analysis of Temer’s economic challenges, click here.

Structural reforms including a limit on government spending are more important than one-time budget cuts for putting Brazil’s fiscal accounts in order, Finance Minister Henrique Meirelles said Tuesday. The spending ceiling will be adjusted according to inflation from the previous year, with expenditure requirements for health and education subject to that limit, he added.

‘Reform Agenda’

Two of the measures announced Tuesday -- scrapping the country’s sovereign wealth fund and asking development bank BNDES to repay its Treasury debt -- could be implemented by executive decision, and both would help reduce the public debt.

Yet the spending cap entails amending the constitution. To achieve that, the government would need support from at least three-fifths of Congress. Members of Temer’s political party say they’re confident they have enough votes even after Romero Juca -- who was spearheading efforts to pass the measures in Congress -- was forced to leave Temer’s cabinet this week and return to his previous job as senator.

"While Juca’s departure was a setback, everything suggests the Senator will remain a key leader coordinating Temer’s reform agenda in Congress," analysts at political consulting firm Eurasia Group wrote in a research note on Tuesday. "Temer’s reform agenda will advance."

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SOURCE/LINK:http://agenciabrasil.ebc.com.br/en/politica/noticia/2016-05/interim-president-temer-argue-fiscal-target-proposal-congress

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Politics
Brazil interim president to argue fiscal target proposal before Congress




Versão para impressão
21/05/2016 13h18
Brasília

Paulo Victor Chagas reports from Agência Brasil

Interim President Michel Temer decided to go to Congress next Monday (May 23) to present the new fiscal target proposal for this year—a $48.1 billion budget deficit.

The estimated amount exceeds the $27.3 billion deficit announced in March by the economic team of President Dilma Rousseff, who is now suspended.

Temer met with his economic team before Finance Minister Henrique Meirelles announced the new proposal on Friday (20). His planned appearance before Congress is meant as a message of respect for the legislature, who must approve the new target, and an attempt to sensitize them to important economic measures for the government, beginning with the fiscal target.

The National Congress has until May 30 to approve Temer's new fiscal target proposal. The former proposal announced by Rousseff's administration in March—revising the $6.7 billion surplus to a $27.3 billion deficit—was left unvoted as Congress shifted its focus to the impeachment proceedings.

Translated by Mayra Borges

Edited by: Luana Lourenço / Nira Foster

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[PORTUGUESE VERSION]

SOURCE/LINK:http://economia.estadao.com.br/noticias/geral,governo-aprova-nova-meta-fiscal-no-congresso,10000053318

Governo aprova nova meta fiscal no Congresso

Rachel Gamarski, Valmar Hupsel Filho, Daiene Cardoso - O Estado de S.Paulo

25 Maio 2016 | 05h 39 - Atualizado: 25 Maio 2016 | 05h 39

Sessão, que durou mais de 16h, foi marcada pelas tentativas da oposição de obstruir a votação

BRASÍLIA - Em votação simbólica, o Congresso Nacional aprovou na madrugada desta quarta-feira, 25, a alteração da meta fiscal que permite um déficit de R$ 170,5 bilhões nas contas do governo central ao final de 2016. Com mais de 16 horas de votação, os deputados e senadores votaram ainda 24 vetos presidenciais que trancavam a pauta.

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O projeto aprovado pela Casa inclui R$ 56,6 bilhões de riscos fiscais, passivos e despesas já contratadas, itens como a possibilidade de redução do resultado fiscal dos Estados, uma quantia de R$ 9,0 bilhões para evitar a paralisação de obras do PAC, além de R$ 3,5 bilhões para a Defesa e R$ 3,0 bilhões para a Saúde.

A nova equipe econômica conseguiu ainda o descontingenciamento de R$ 21,2 bilhões. Em março, o time então comandado pelo ex-ministro da Fazenda Nelson Barbosa pediu o contingenciamento temporário. A intenção do governo com a liberação dos recursos é garantir a continuidade do funcionamento da máquina pública.

A meta fiscal aprovada nesta madrugada precisará ser sancionada pelo presidente em exercício, Michel Temer e prevê que o governo entregue, ao final do ano, um déficit de R$ 163,942 bilhões no setor público consolidado. O Governo Federal deverá apresentar um resultado primário negativo de R$ 170,496 bilhões. Para Estados e municípios, espera-se um superávit de R$ 6,554 bilhões.

O presidente do Congresso agilizou a votação da meta fiscal. Já de madrugada, Renan evitou a votação dos destaques em separado e, também em votação simbólica, rejeitou os 15 destaques apresentados.

Com a aprovação da matéria o governo não precisará mais contingenciar R$ 137,9 bilhões no orçamento deste ano, o que seria impossível já que a base contingenciável é de apenas R$ 29 bilhões. A equipe econômica contava com a votação do projeto até o segunda-feira (30) para evitar um descumprimento da Lei de Responsabilidade Fiscal.

O senador Romero Jucá (PMDB-RR), que é ex-ministro do Planejamento e construiu a proposta de mudança fiscal, esteve presente durante todo o dia e foi um dos primeiros a falar durante a sessão do Congresso. Já durante a madrugada, Jucá pediu a palavra para rebater críticas que recebeu de deputados oposicionistas após o vazamento de áudio em que se mostra contra a operação Lava Jato.

A sessão foi marcada pelas tentativas da oposição de obstruir a votação. Os deputados oposicionistas, além de atacarem o ex-ministro do Planejamento, também pediram, diversas vezes, que a mudança da meta fosse votada na Comissão Mista de Orçamento (CMO). O presidente da Casa precisou intervir para evitar que a sessão se arrastasse ainda mais.

O relator da matéria, deputado Dagoberto (PDT-MS) encaminhou um parecer favorável à aprovação e acatou, integralmente, os pedidos do governo. Durante a leitura do seu relatório ele classificou o déficit de R$ 170,5 bilhões de "justo e bom para o País".

Na avaliação do deputado, a nova equipe econômica, comandada pelo ministro da Fazenda, Henrique Meirelles, está fazendo um "esforço legítimo para restabelecer confiança" e não se pode ignorar as dificuldades financeiras que o País está enfrentando. "Nesse contexto acreditamos que a equipe econômica fará todos os esforços para permitir que déficit público tenha trajetória sustentável", afirmou antes de ressaltar que "o ajuste fiscal é necessário".

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