Brazil seeks 20-year spending cap to curb national debt

[Judi Lynn]

Wed Jun 15, 2016 6:44pm EDT
Brazil seeks 20-year spending cap to curb national debt

BRASILIA | By Alonso Soto and Maria Carolina Marcello


Brazil's interim President Michel Temer on Wednesday proposed a constitutional amendment to limit public spending growth for up to 20 years, one of the most far-reaching fiscal reforms in decades designed to curb a runaway rise in public debt.

The government, including the legislative and judiciary branches, will be obliged to limit annual spending growth to the inflation rate of the prior year if the flagship reform is approved in Congress, according to a Finance Ministry statement.

The move signaled a victory for economic hardliners in the cabinet, led by Finance Minister Henrique Meirelles, who overcame calls from a faction pushing for a shorter cap.

. . .

Temer's government has abruptly steered Latin America's largest economy to the right after 13 years of rule by the leftist Workers Party, in a trend towards market-friendly policies also seen in neighboring Argentina.

More:
http://www.reuters.com/article/us-brazil-politics-idUSKCN0Z120S

[tonyt53]

1. Greece in the western hemisphere.