Brazil plans budget freeze for up to 20 years

Joe Leahy – The Financial Times, 06/19/2016

An ambitious constitutional amendment to freeze budget spending would cut the uncertainty over public finances that is the root cause of Brazil’s deep recession, according to the country’s new finance minister.

“With this kind . . . of tough fiscal policy . . . everyone will be able to project the numbers,” Henrique Meirelles said in an interview with the Financial Times. “A lot of the uncertainty is coming down.”

The plan to eliminate real increases in budget spending for up to 20 years is the central plank of a number of reforms — from fiscal policy to rules on pensions and the operation of Petrobras, the scandal-hit state oil company — that the government of interim president Michel Temer is rushing through congress.

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