Brazil's president says expects some ministers to step down

Reuters News
Posted: Apr 17, 2017 10:56 AM

BRASILIA (Reuters) - Brazilian President Michel Temer said on Monday he expects some of his ministers to resign after they were implicated in a massive corruption investigation, but said this would not stop his government from approving landmark economic reforms.

Eight of Temer's ministers were mentioned by executives of engineering group Odebrecht SA in plea bargain testimonies made public last week.

Temer reiterated that he would not fire any of his ministers before they are formally accused by prosecutors, which could take months or even years. However, he said that the scandal is "embarrassing" and may lead some ministers to step down.

"It is very likely that some ministers will feel uncomfortable and believe that they cannot continue," Temer said in a radio interview.

The Odebrecht testimonies escalated a crisis that started three years ago with an investigation into kickbacks at the state-run oil company Petrobras and that already contributed to the impeachment of leftist President Dilma Rousseff last year.

The president has sought to keep the scandal from thwarting his efforts to pass pension and labor reforms needed to keep public finances under control in the years ahead.

The reforms are also considered crucial by investors to pull Brazil out of recession.

The government was expected to present its final pension reform draft on Tuesday to Congress, where a third of the senators and dozens of representatives are under investigation.

With many lawmakers fearing their chances of re-election, the government was expected to ease some of the more stringent elements of the proposal, including a new retirement age. As such, Temer said another pension reform may be needed in 10 or 15 years.

Finance Minister Henrique Meirelles, who has reiterated the need for a tough reform, on Monday said many points of the draft bill were still being discussed.

The government expects to approve the pension reform by July, according to lawmakers that attended a meeting with Temer on Sunday. The reform plan, submitted last year to Congress, sets a minimum retirement age at 65 for both men and women and requires more years on the job for workers to gain full pension benefits.

Temer has also sought to overhaul the labor code in an attempt to reduce costs to companies. The lawmaker in charge of drafting that bill presented his suggestions last week to an empty Congress.

(Reporting by Lisandra Paraguassu and Ricardo Brito; Writing by Silvio Cascione; Editing by Chizu Nomiyama and Meredith Mazzilli)