Brazil Congress approves bill changing 2016 fiscal target

In a session that lasted more than 16 hours, Brazil's Congress approved early on Wednesday (May 25) the bill revising the fiscal target for 2016. The text authorizes the federal government to post a primary deficit of up $48 billion before interest payments this year.

"The approval of the target results in a real revenue adjustment, because the revenue forecast a surplus of $8.45 billion, which was in the text from the previous government, it was something very unreal. We are adjusting the revenues, adjusting expenses, and recouping strategic investments to the country," said Senator Romero Jucá, ousted planning minister.

The fiscal target indicates the saving the government needs to make to pay the public debt. Lawmakers passed the report, which supported the bill approval and pointed out Brazil's "exceptional moment." "We cannot ignore the financial difficulties the country is facing. The political moment requires great effort from everyone in order to resume growth", said Deputy Dagoberto Nogueira, responsible for producing the report.

The interim government has justified the new target by listing the difficulties created by the economic crisis and the reduction of revenues caused by the decline of 3.8% in GDP. The fiscal target would have to be changed until May 30 or the government would be “paralyzed,” since it would be necessary to cut more expenses to reach the target submitted by suspended President Dilma Rousseff, who forecast a budget surplus.

Conflicts and protests

The session of Congress convened to deliberate on presidential vetoes and the fiscal target began Tuesday (24) morning at 11am and was marked by pro- and anti-government speeches, engaged in a political battle about the issue. The opposition did their best to obstruct the proceedings and extend the voting on vetoes. They aimed to end the session for lack of quorum without voting the fiscal target.

Lawmakers took turns to criticize the bill with the revised target. "It is not possible to expand the deficit to $48 billion forecasting a future revenue loss, this is the paradigm of fiscal irresponsibility. It is another coup! This time against the country's fiscal stability," said Deputy Afonso Florence, leader of the Workers' Party (PT) in the Chamber of Deputies.

The opposition has also criticized the voting proceedings. "Senate President [Senator Renan Calheiros] adopted some positions different from the ones he used to adopt," criticized Senator Humberto Costa, referring to the fact that Calheiros put the bill to vote without letting the parties instruct their benches.

Translated by Amarílis Anchieta