Brazil Senate Chief Says Rousseff Austerity Plan Threatens Jobs

Brazil Senate Chief Says Rousseff Austerity Plan Threatens Jobs

By Mario Sergio Lima Arnaldo Galvao / Bloomberg

1:59 PM BRT

April 30, 2015

President Dilma Rousseff’s fiscal-austerity program threatens jobs, Brazil’s Senate leader said, underscoring the challenge her government faces in pushing the measures through Congress.

“This can’t even be called a fiscal adjustment,” Senate President Renan Calheiros, a member of Rousseff’s coalition, told reporters in Brasilia Thursday. “The fiscal adjustment needs to cut the fat, reduce the number of ministries and political appointments. Without that, it’s an adjustment for workers that only cuts their benefits.”

The criticism comes as the government’s economic team tries to convince lawmakers to approve belt tightening measures that include cuts to unemployment and pension benefits. Rousseff is struggling to reduce the public debt and stave off the second sovereign-credit downgrade of her presidency.

Speaking two days after unemployment rose to a three-year high, Calheiros urged the president to develop a plan to protect jobs. He said the Senate on May 5 will hold a session with economists to discuss the outlook for Brazil.

The economy will shrink 1.1 percent in 2015, the deepest contraction since 1990 before rebounding in 2016, according to analysts surveyed by the central bank. Planning Minister Nelson Barbosa said April 27 that the government needs to slow above-target inflation and stabilize fiscal accounts to ensure an economic recovery.