Good morning! We’re covering today’s upcoming pension reform vote (and what comes next). The Brazilian stock market reaches a record high. And, the OECD’s worries about Brazil’s anti-corruption efforts. (This newsletter is for platinum subscribers only. Become one now!)
Pension reform: is this it?
Today, the Senate is expected to finally approve an overhaul to Brazil’s pension system—finishing an eight-month-long legislative process. As with all proposals to change the constitution, the reform needs to be approved by two-thirds of each congressional house in two rounds of votes. The whip count in the Senate is highly favorable to the proposal.
Why it matters. The pension reform is a core point in the agenda of Economy Minister Paulo Guedes. It is also one of his most controversial proposals. When the reform passes, the government will be able to move on to other proposals that won’t stir up as much heated debate as retirement pensions.
Glass half full? The reform will allow for over BRL 800 billion in savings for the government over the next ten years. Moreover, it is a signal to investors that Brazil is committed to more austerity. But since being presented, the bill has been significantly altered—many of the...