Bolsonaro calls for pension reform support to "do not end up like Argentina"

At breakfast with journalists, the Brazilian president Jair Bolsonaro He urged legislators in his country to approve the pension reform promoted by his government, failing which "We are going to end up like Argentina". "The ship is about to be reformed.If it is not true, chaos will be installed because no one else will trust Brazil," he said. added.

"With an economy less than one trillion reais, we will end up like Argentina," said Bolsonaro, citing savings made by the state. According to the promise of the Minister of Economy, Paulo Guedes, a decade of reforms will be needed.

On Thursday, the Ministry of Economy said Thursday its projection on the economies that will achieve the anticipated reform of the pension system to R $ 1.237 billion ($ 310 billion) over the next decade, well at above the estimates provided by the government. Government

This figure represents an increase of 15.4% over the government's original target of 1.072 billion reais, which, according to many economists, is extremely optimistic, while it should still be discussed with about seven votes. President Jair Bolsonaro said that the reform could only generate 800 billion real savings.

In statements to journalists, Pensions and Labor Secretary Rogério Marinho said the updated projection was a government objective and that Bolsonaro's previous statements on the reform had been made with the firm intention of respecting the role of the government. played by Congress in the process.

Bolsonaro issued Wednesday evening a message on radio and television to celebrate the partial approval of the pension system reform. "The new forecasts will allow Brazil to resume growth, create jobs and reduce mainly social inequalities, because the poor will pay less," said the president. "Brazil is in a hurry (…), the government continues to rely on the patriotic spirit of parliamentarians for the approval of the new social protection system," he said.

The message was delivered one day after the approval by the Committee on the Constitution and Justice of Deputies, after 9 hours of heated debates, the proposed amendment of the constitution of the pension system, developed by the "super director "Guedes.

After weeks of delay, the lower house of the Brazilian Congress is moving forward, pushing the government's important pension reform with the creation of a committee expected just days after declaring the bill to be constitutional.

The victory won at the Committee on the Constitution and Justice of Deputies opened the way for the formation of a special commission which will be in charge of the issue before sending it to plenary. The commission will be headed by Marcelo Ramos, a member of the center-right Republic Party, and the commission's talks will run from May to June, Rodrigo Maia, speaker of the lower house, said Thursday.

As this is a constitutional reform, a special majority of three-fifths of the plenary of deputies is required before going to the Senate, where an equal number of legislators is needed. The special commission represents the second stage of a tumultuous debate process that requires seven votes in total for the final approval of the reform.

The speed of action of legislators represents a shift from weeks of disputes and delays that have deferred the bill and caused nervousness in local markets. Investors and government officials felt that reform was essential to reduce debt and reactivate the largest economy in Latin America.

Bolsonaro said he expected the law to be approved with as few amendments as possible, but lawmakers stressed that the government could expect strong discussions in the special committee on the central principles of the bill. Bill, including a proposal concerning age. minimum retirement.

The real rebounded 0.8% early in the afternoon, the largest gain among the 24 emerging market currencies, followed by Bloomberg. The stock market benchmark, Bovespa, gained 1%. On Wednesday, Brazilian markets fell sharply after the government was forced to make several concessions just to send the bill to the special commission.

With information from Reuters, Bloomberg and Estadao