Mon. Apr 22nd, 2019

Minister reiterates that Brazil goes bankrupt if it does not change pension regime

Minister reiterates that Brazil goes bankrupt if it does not change pension regime



Brazil's Economy Minister Paulo Guedes appeared before a parliamentary committee on Wednesday to discuss a controversial reform of the pension system and said that if that alteration is not approved, the country "will go bankrupt."

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Guedes, who should have attended a debate on the same issue last week but was absent, was finally presented before the Constitution and Justice Committee of the Chamber of Deputies, which represents the first obstacle to the project presented by the right-wing government Jair Bolsonaro.

The minister defended with fervor the proposal, by means of which it is tried to establish a minimum age to accede to the retirement, a requirement that does not exist in the Brazilian legislation and that would happen to be of 62 years for the women and of 65 for the men.

Likewise, the progressive substitution of the current pay-as-you-go system is proposed by an individual capitalization system, similar to that existing in Chile, which was the object of the biggest protests by the left opposition, which denounced what, in its opinion, would be a "delivery" of retirement funds to private banks.

"This proposal is a crime, it will destroy the public retirement system, which is guaranteed in the Constitution, and make it almost impossible for a poor person to retire," said deputy Alencar Santana of the Workers' Party (PT).

Through this reform, the Government aims to save some 265,000 million dollars in a decade, which Guedes said would end with a chronic fiscal deficit and resources for investment in essential areas, such as health and education.

However, according to the opposition, the money needed for these investments and even to balance the deficit retirement system would be obtained through a deep tax reform, which would include a tax on fortunes and financial capital.

In the opinion of the minister, however, the current pension system is "broken", a situation that will worsen and affect the country as a whole, due to a demographic growth that will lead to "in a few years, for every young person working and contributing four or five retirees. "

Guedes, a liberal trained at the Chicago School, became irritated at times and admitted that there are "different ideological views" on the resolution of fiscal problems, but stressed that in the elections last year "won a government" that "thinks thus "and that" comes with its proposals "to Congress.

"If you do not want this, do not approve it," the minister challenged the minority left opposition, which has strongly opposed the proposal.

After listening to the minister, the Constitution and Justice Committee of the Lower Chamber will continue its debates and will discuss a report that will be prepared by Deputy Marcelo Freitas, of the Liberal Social Party (PSL), which served Bolsonaro as an electoral platform.

According to the president of the commission, Felipe Francischini, the debates will continue until April 17, when the 27 members of that group are expected to approve or not the report prepared by Freitas, who should recommend moving forward with the project or, in its defect, which is modified or even archived.

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