Halister News

(Bloomberg) -- President Michel Temer would show a ’’strong commitment’’ to the fiscal adjustment if he vetoes the bill on states’ debts approved by lower house without any austerity requirements, Fabio Klein, analyst on public finance at Tendencias Consultoria, says in a phone interview.

• Potential veto would be a “positive surprise”
  • Only doubt is how the government would handle it politically, as the lower house didn’t approve the requirements previously included in the bill
• Putting the requirements back on the bill could save time, favoring the fiscal adjustment process; without them, the Finance Ministry would need to negotiate the conditions with each state separately
  • Requirements included in a federal bill also could work as guidance for indebted states, representing a starting point for their own fiscal adjustment programs
• NOTE: Brazil’s Temer Decides to Ask for New States Debt Bill: G1