Brazil Congress passes budget bill, opens way for new minister

Reuters News
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Posted: Dec 09, 2014 6:12 PM

BRASILIA (Reuters) - Brazil's Congress approved late on Tuesday a controversial budget target bill whose passage opens the way for President Dilma Rousseff's new economic team to take office as soon as this week.

Delaying tactics by her opponents and lukewarm support from allies delayed for three weeks approval of an amendment to the budget law. The amendment loosens fiscal saving goals for this year that the Rousseff administration was not able to meet.

A senior government official said last week that incoming finance minister Joaquim Levy would take office once the budget bill got passed so as to "avoid a legal problem" and shield him from political fallout from failure to meet the annual primary fiscal surplus target.

The new team, which includes Nelson Barbosa as planning and budget minister, could take office on Thursday or Friday and the rest of the cabinet on Jan. 1 when Rousseff's second term begins, the official said.

Narrowly re-elected in October, Rousseff picked banker Levy to shift economic policy toward austerity measures needed to put government finances in order, recover credibility among investors and revive a stagnant economy.

Levy initially plans to raise fiscal revenues with a mix of tax increases and the elimination of tax breaks, officials say.

Fiscal accounts have deteriorated to the point where Brazil risks ending 2014 with its first annual primary deficit in two decades and faces the threat of a credit rating downgrade.

(Reporting by Anthony Boadle; editing by Andrew Hay)