Buenos Aires Times

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Brazilian government admits defeat on controversial pension reform

President Michel Temer had been hoping to push through the downsizing of the pension system in the coming days.

Tuesday 20 February, 2018
Demonstrators take part in a protest against the social welfare reform bill introduced by President Michel Temer government which seeks to extend the years of contributions and raise the minimum age for retirement, in São Paulo, Brazil, earlier this month.
Demonstrators take part in a protest against the social welfare reform bill introduced by President Michel Temer government which seeks to extend the years of contributions and raise the minimum age for retirement, in São Paulo, Brazil, earlier this month. Foto:AFP-Nelson Almeida

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Brazil's centre-right government has conceded defeat in its attempts to push through controversial cuts to the pension system, which had long been presented as a keystone of austerity reforms.

President Michel Temer had been hoping to push through the downsizing of the generous pension system in the coming days. However, the government has failed to win enough support in Congress, where lawmakers will have to face voters in an October general election.

The killer blow was applied last week by Temer himself when he signed a decree putting the Army in charge of security in Rio de Janeiro, where crime has got out of control.

That made the pension vote impossible because changing the system would require a constitutional amendment and such amendments are not legally allowed while a military intervention is underway.

Government secretary Carlos Marun said Monday that the reforms were now dead in the water.

"The security problem (in Rio state) became so explosive that we had to take exceptional measures. Suspending passage of the pension reforms was a collateral effect," he said.

The fading away of the reform marks a significant setback for Temer, who took power in 2016 after the controversial impeachment of leftist president Dilma Rousseff.

He has portrayed himself as a reformer determined to bring rigour to Brazil's economy after a two-year recession, plunging investor confidence and high-level corruption scandals.

The idea of cutting benefits and delaying early retirement was deeply unpopular with voters, although welcomed by financial markets. Temer's own credibility has also taken severe blows from allegations of corruption.

That made getting the needed 308 votes out of 513 in the Chamber of Deputies an uphill struggle.

Marun said that political conditions for such a measure will now only "come with the election in October."

In the interim, the government is announcing a package of 15 measures that it says will help boost the slowly improving economy, although analysts say much on that list has already been sent to Congress.

Former president Luiz Inácio Lula da Silva currently leads in opinion polls for the presidential race in October. However, he has been sentenced to 12 years in prison for corruption and is making a last-ditch attempt to stay out of jail.

- TIMES/AFP

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