We’re covering a Senate decision on civil servant salaries that is set to affect the government’s austerity platform. Projections for Brazil’s economy improve, but the population is still pessimistic. And the government threatens to postpone the census for another year.
Senate unfreezes civil servant salaries in bad omen for government’s cost-cutting plan
The Brazilian Senate struck down a presidential veto that blocked pay raises for civil servants in 2020 and 2021. The move broke with a deal struck between Congress and the government back in April: lawmakers agreed to freeze public servants’ salaries in exchange for a BRL 125-billion plan of financial aid for state and municipal governments.
Why it matters. Unfreezing salaries would generate extra costs of BRL 98 billion according to government experts. And it spells a bad omen, as Congress is prepared to vote on other presidential vetoes that, if struck down, will create a major fiscal impact to an already cash-strapped administration.
How it happened in the Senate. We explain how this entire process unfolded:
- At odds with the speaker of the lower house, Rodrigo Maia, Economy Minister Paulo Guedes made sure the agreement over a bailout to states and cities would be drafted in the...