Good morning! We’re covering the bold new economic plan presented by Economy Minister Paulo Guedes. Brazil’s mega oil auction to take place today. And a crackdown on major debtors to federal authorities. (This newsletter is for platinum subscribers only. Become one now!)
Paulo Guedes wants a revolution for Brazil’s state
On Tuesday, Economy Minister Paulo Guedes presented the Senate with a plan to completely overhaul the structure of the Brazilian state. It has been labeled by economists as the boldest such undertaking since the Real Plan, which created Brazil’s longest-lasting currency. Here are the main points of the project:
- Tax breaks. There would be a cap of 2 percent of GDP for tax exemptions (currently at 4 percent), which should give the government an extra BRL 150 billion in revenue each year.
- Spending. Laws or judicial rulings creating additional expenses would only be enforced if there is space on the budget.
- Civil servants. After declaring a state of financial emergency, administrations at all levels would be able to cut working hours and salaries of civil servants by up to 25 percent.
- Federation 1. Brazil would become a true federation. States and municipalities would have more autonomy (and receive an...