"O maior inimigo da autoridade é o desprezo e a maneira mais segura de solapá-la é o riso." (Hannah Arendt 1906-1975)

quarta-feira, 30 de setembro de 2015

Brazil Congress Postpones Vote on Dilma Rousseff's Vetoes on Extra Spending

10/1/2015 2:44 AM, Dow Jones


     BRASÍLIA--Markets are bracing for another tense day in Brazil after Congress on Wednesday postponed a vote that analysts say could have kept the country's shaky finances from getting even worse. 
BRASÍLIA--Markets are bracing for another tense day in Brazil after Congress on Wednesday postponed a vote that analysts say could have kept the country's shaky finances from getting even worse.
Lawmakers seemed on track to ratify President Dilma Rousseff's vetoes of spending bills that could add an estimated 127.8 billion Brazilian reais ($32.3 billion) to an already large budget gap. But after a full day of intense political fighting, legislators couldn't agree on going ahead with the vote, to investors' chagrin.
"It is terrible news," economist Monica De Bolle, from a visiting fellow at the Peterson Institute for International Economics in Washington, D.C., said about the delay. "It shows that there is no understanding between the president" and her allies in Congress. "We are looking at another day of turbulence in the markets," she said.
The Brazilian real has hit historic lows in the past few days as investors have watched politics impede economic reform, while Latin America's largest economy continues to sink into recession.
Brazil is expected to contract 2.7% this year, according to the central bank, while inflation approaches double digits. The end of the commodities boom, mixed with a profusion of homegrown problems, has significantly reduced government revenues. As a result, the budget deficit reached 9.2% of gross domestic product in August, the highest reading since the central bank began keeping tabs on it in 2001.
Earlier in September, Standard & Poor's rating agency became the first to cut Brazil's grade to junk, and analysts fear that Moody's or Fitch could follow suit, although none of them has indicated such a move is imminent.
Adding to the economic woes, lawmakers are reluctant to side with a deeply unpopular leader. After narrowly winning re-election a year ago, Ms. Rousseff has seen her popularity fall to 10%, as the once prosperous economy has slipped into recession.
Ms. Rousseff is expected to announce this week a cabinet shuffle aimed at giving more posts to allied leaders, which could generate support in Congress. But the president is taking longer than expected to announce the new ministers, and it may have influenced lawmakers' decision to postpone the vote.
"Of course, they are waiting to see who the new ministers are," said Thiago de Aragão, a political analyst at consulting firm Arko Advice in Brasília. He says Brazilian politics have grown increasingly dysfunctional, to the point that trust is in very short supply. "There is no loyalty anywhere in the government anymore," he said.
(END) Dow Jones Newswires
September 30, 2015 20:44 ET (00:44 GMT)

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