Brazil’s Congress Prevents Financial Collapse by Approving Supplementary Credit

By Newsfeed

RIO DE JANEIRO, BRAZIL – Brazil’s Congress on Tuesday approved an additional debt debt authorization of R$248.9 (US$64.52) billion to ensure the government can make payments for social programs and meet other expenses.

The lower house and the Senate unanimously approved the bill in a joint session after it had been endorsed by the federal budget committee earlier on Tuesday. It still needs to be signed by President Jair Bolsonaro.

Bolsonaro reached agreement on Tuesday with centrist and opposition parties and took the government out of the political and administrative paralysis in which it had been mired.

Determined to comply with the so-called “golden rule” of government finances, which forbids borrowing to pay for current expenditures, the president spent the last few days threatening to stop paying social welfare benefits and launching a farm crop financing program.

The bill is a priority for Bolsonaro’s government, currently struggling to repair what most economists call an unsustainable public deficit. The legislation is seen as a way to work around the “golden rule”.

“It is the largest debt authorization ever approved by the National Congress,” Senate President David Alcolumbre said briefly before announcing the result, saying that the decision shows “political maturity” by all parties.