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Brazil's New President Promises Investors Political Stability

  • Reuters

FILE - Brazilian President Michel Temer, in office just three weeks, is already facing divisions within his alliance in Congress, with some lawmakers promising to water down the fiscal reforms.

FILE - Brazilian President Michel Temer, in office just three weeks, is already facing divisions within his alliance in Congress, with some lawmakers promising to water down the fiscal reforms.

Brazilian President Michel Temer on Wednesday promised political stability for foreign investors willing to put their money in a country weathering the impeachment of his predecessor and the worst recession in generations.

Speaking for the first time to investors in New York, Temer said he was confident he would have enough backing in Congress to pass unpopular fiscal reforms needed to plug a ballooning budget deficit and regain the confidence in the once-booming economy.

Temer, formally sworn in three weeks ago, has managed to get minor bills approved in Congress after months of political turmoil that led to the impeachment of his leftist predecessor, Dilma Rousseff.

However, the 75-year-old constitutional scholar is already facing divisions within his widely diverse alliance in Congress, with some lawmakers promising to water down the fiscal reforms.

The head of his economic team, Finance Minister Henrique Meirelles, told investors at the same event that he saw "extremely high chances" of approval for a key proposal to cap public expenditures.

Meirelles said a controversial reform to reduce generous pension benefits and set a minimum retirement age would most likely be approved next year.

The proposed reforms and management changes in key state-run enterprises are shoring up confidence in Brazil, which is on track for a gradual recovery after two years of recession, Meirelles said.

"Our actions aim to reduce the debt burden and increase productivity," Meirelles said.

He added that the government could consider selling debt abroad again this year if markets continue to remain favorable.

Temer, who was in New York to address the U.N. General Assembly, on Tuesday assured world leaders at the gathering that the dismissal of Rousseff was fully constitutional.

However, delegations of some leftist governments walked out of the session to express their objections to his legitimacy.

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