Brazilian president insists reforms will go ahead despite scandals

President of Brazil Michel Temer [CP DP Press/ Shutterstock]

Brazilian President Michel Temer told EURACTIV’s partner EFE in an exclusive interview that his reform agenda remains unaffected by a number of serious corruption scandals.

Temer gave a detailed account of the reforms that have already been approved, including setting a ceiling on public spending increases over the next two decades, as well as a number that are still in progress.

Among the latter category, the president highlighted the “fundamental” importance of minimising the strong protectionism of Brazil’s labour laws and of introducing reforms that impose a minimum age for retirement.

“We are gradually convincing Brazilian society of their importance,” Temer explained, while acknowledging that the reforms are not translating into increased popularity for his administration, which some pollsters still rank as low as 10%.

The president insisted that the government’s low approval is down to the fact it is not guided by “populist acts”, which he claimed are “irresponsible, because they yield a good result tomorrow but are a disaster the day after that. That’s what has happened in the past”, in a clear dig at his predecesser, Dilma Rousseff.

Rousseff was dismissed last August due to budget irregularities and Temer, who was her vice president, assumed power during a “deep recession” and “monumental unemployment”, he told EFE.

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The current president insists that his government has differentiated between “populist acts for the populists” from those that benefit the public and which will take time to feel.

Temer said that in the eight months he has been in office, the economy has started to react and that unemployment, which affects 13 million Brazilians, has started to abate, albeit very slowly.

He also stressed the importance of reforming the retirement law, in order to “save” a system that has a deficit of millions of dollars and which is at risk of collapse.

Temer, who is the oldest person to assume the office of president, pointed out that inflation has fallen from its 10.67% high in 2015 to 4.5% in 2016. It is predicted to fall to 4% this year.

He also mentioned that interest rates are going down and have already stabilised from 14.25% to something “approaching single digits”. Temer insisted that inflation will be crucial to the country’s recovery.

Credit rating agency Moody’s recently downgraded Brazil’s risk rate from 575 points to 280.

The president pointed out that this improvement has also been extended to Brazil’s largest companies, like state-owned Petrobras, which has found itself in the maelstrom of its own corruption scandal and which has led to more than a hundred politicians and executives being investigated.

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“Petrobas was an ugly word” but today it has “recovered its market value” and ratings agency’s have upped their evaluations, Temer explained. He insisted that he has received dozens of calls from investors “willing to bet on Brazil” since the start of the year.

Many of those investments come from Spain, which is only bested by the United States in terms of capital held in Brazil. Spanish Prime Minister Mariano Rajoy visited Temer after this interview was held in the Brazilian capital of Brasilia.

Temer told Reuters that he is confident Spain will collaborate to finalise a trade deal between the Mercosur and European Union trade blocs.

Brazil is a member of Mercosur along with Argentina, Paraguay and Uruguay. The European Union has demonstrated fresh appetite recently for concluding long-gestating trade negotiations with the South American power.

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