Brazil’s lower house of Congress has approved the base text of a bill to provide debt relief for the country’s cash-strapped states in return for austerity measures.
Yesterday lawmakers at the lower house of Congress voted 301-127 to offer states federal assistance and debt relief in for cash-strapped states in exchange for reducing tax exemptions, selling off public companies, capping their payroll and other austerity measures. Amendments to the bill will be voted today. The bill can defuse a potentially bigger, state-triggered financial crisis, while insisting on austerity measures in exchange.
Earlier yesterday, the government lost a vote in the lower house to fast-track its proposed labor reform. Strong opposition in the lower house to the crucial reforms, such as the pension reform proposal, prompted the government to concede on several issues of the plan to help secure approval. Finance Minister Henrique Meirelles said on Tuesday that the latest version of the bill will maintain around 80 percent of the initially expected savings.