Breakthrough in Brazil as Congressional Leaders Back Reform

  • Chairman of lower house pension commission expects 350 votes
  • Congressional leaders of governing coalition now support bill

Brazil’s Congressional leaders appear increasingly confident of securing approval for the government’s pension overhaul, after a series of setbacks threatened President Michel Temer’s hallmark legislation.

With 308 votes in the lower house required to pass the legislation, the chairman of the Chamber of Deputies’ special pension committee, Carlos Marun, told reporters in Brasilia on Tuesday that he expects over 350 votes in favor. Leaders of the ruling coalition in the lower house will recommend that their party members support the pension reform, said Deputy Arthur Maia, who is shepherding the bill through Congress.

Marun’s comments suggest a breakthrough in negotiations after yet another round of face-to-face talks between Temer and congressional leaders. Over recent days the government has offered various concessions to the reform to secure its backing, after the Estado de S. Paulo newspaper published a poll showing fewer than 100 deputies backed the bill. The government and market analysts say that failure to tackle Brazil’s spiraling pension deficit would undermine the country’s fragile economic gains after the worst recession on record.

The real, which had been under pressure due to uncertainty over support for the legislation, pared losses after the comments, trading at 3.1395 per dollar at 3:17 p.m. local time, while the Bovespa, the Sao Paulo stock market, bounced back into positive territory.

Maia said that Tuesday’s meeting represented the most progress so far for the reform, adding that the text is not yet finalized. Although the government has conceded on a number of issues, Temer earlier insisted there would be no backsliding on the need for a minimum retirement age of 65.

Finance Minister Henrique Meirelles said these changes could reduce the projected savings of the bill by between 15 percent and 20 percent.

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