Jair Bolsonaro presents new economic reform to the Congress

The measures include the possibility that the State declares itself in a "fiscal emergency" when its current expenses exceed 95% of its income

The president of Brazil, Jair Bolsonaro, presented to Congress on Tuesday a  new reform that include the possibility that the government, states and municipalities declare themselves in “fiscal emergency” because current expenses exceed 95% of income of the State, thus reducing the salary of its officials.

Among the measures presented, he proposed to accelerate privatization and approve five constitutional reforms, including a “federative pact” that refers to the decentralization of resources, including oil. It also contemplates the disindexation of the budget and the end of some obligatory expenses.

The implementation of this reform will allow municipalities and states to receive up to 400 billion reais, equivalent to 100 billion dollars over the next 15 years. However, they will be obliged to make their own adjustments to rebalance the budgets.

Although the reforms require the approval of a qualified majority in three fifths both in the House and in the Senate, Bolsonaro has a quick way out. “We are sure that in a short time, maybe at the beginning or by the middle of next year, this proposal will become a reality,” said the head of government when delivering the project to Congress.

Although Bolsonaro’s far-right trend has triggered constant controversies, the president has great support from the Congress and markets. Recently, the reform of the retirement regime was approved and despite the fact that the amendment hardens pension benefits in receiving full service, it was approved by majorities far superior to those required, even with the support of the center-left representatives.


Source: finanzasdigital

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