Happy Friday! Today: Guedes gives Congress a tough choice to make. Covid hearings committee suffers a setback. And a marvelous 2021 for agriculture.
Between fiscal pedaling and shutdown
Economy Minister Paulo Guedes said on Thursday that, if Congress would not allow the government to divide court-mandated payments into dozens of installments – in total amounting to BRL 90 billion (USD 16 billion) in 2022 – there will be little to no money “for anything else.”
- The controversy revolves around precatórios, a sort of IOU bond issued after the government loses litigation and exhausts all appeals.
- Strapped for cash, the government wants Congress to change the rules on the payments, which economists equate the plan to default. But without the change, cash-transfer policies planned by President Jair Bolsonaro to boost his re-election chances will be heavily compromised.
- A week ago, Brazil’s Treasury Secretary explicitly stipulated that the condition for the cash-transfer policies was that default be allowed.
In his own words. “If [the proposal] does not pass, we will use the BRL 90 billion for debt payments and won’t have enough for the rest,” Mr. Guedes told the Senate. “That includes our wages, in the Executive branch, in the Judiciary,...