Guedes negotiates annual limit of debt payments with heads of Congress

Guedes debt payments
From the left: government Senate whip Fernando Bezerra, House Speaker Arthur Lira, Economy Minister Paulo Guedes, and Senate President Rodrigo Pacheco. Photo: Pedro Gontijo/SF/CC-BY 4.0

In a meeting with Senate President Rodrigo Pacheco and House Speaker Arthur Lima, Brazil’s Economy Minister Paulo Guedes agreed to propose an annual limit of payments for government registered warrants — the so-called precatórios.

According to the agreement, the federal government would pay back BRL 39.8 billion (USD 7.53 billion) of its court-ordered debts next year, as opposed to the full total of BRL 89 billion. The idea is that the remaining BRL 50 billion in precatórios will be made separate from the federal spending cap and negotiated with the government’s creditors.

“The [BRL 50 billion] balance could be used in a series of legal situations to solve the precatórios issue, such as the settlement of credit for grants, the acquisition of assets, or the settlement of overdue tax debts,” said Mr. Pacheco, after the meeting.

According to the Senate President, if a maximum limit of precatórios payments is established for next year, this will open up space for the government’s proposed souped-up version of the Bolsa Família wealth transfer program, seen as one of President Bolsonaro’s biggest trump cards in his push for reelection.