The main legislative priorities for Brazil’s government in the next several months will relate almost entirely to the need for fiscal austerity, Finance Minister Henrique Meirelles said at a news conference Monday in São Paulo. “We are very hopeful about a return to economic growth next year,” Meirelles told reporters. “But that will only be possible if Congress passes the fiscal legislation we have sent them.” Meirelles said he was confident Congress will pass a constitutional amendment before the end of the year, setting a cap on government spending at all levels. The amendment would cap increases in spending to previous-year inflation. Meirelles said the government’s top priority for the first half of 2017 is passage of a sweeping reform of the bankrupt social security system. “With these changes in hand, we can begin the process toward ending budget deficits,” he said. “But we can only do that if these reforms are passed.” He said that, with the reforms passed, the government could return to primary surpluses in 2019. Meirelles said another sweeping structural reform, that of Brazil’s 1942 labor code, was not an immediate priority. “We have to take one thing at a time,” he said. He said the government will consider labor and tax reform measures after the two major fiscal proposals are adopted.
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