UPDATE 2-Brazil's new finance chief unveils plan to restore confidence
(Adds Levy comments and context)
By Alonso Soto and Silvio Cascione
BRASILIA Jan 5 (Reuters) - Brazil's government must make difficult budget cuts to improve investor confidence and restore economic growth, the country's new Finance Minister Joaquim Levy said on Monday.
At his swearing-in ceremony in Brasilia, former treasury chief Levy said the fiscal adjustments will require the participation of society as a whole and will involve spending cuts and possible tax hikes.
"Fiscal balance is indispensable in order to continue granting opportunities to our people," Levy said. He said that Brazil would see benefits such as greater business confidence, better-developed credit markets, higher levels of entrepreneurship and greater foreign investment.
Levy named his policy-making team at the same event, tapping former finance ministry official Marcelo Barbosa Saintive to replace Arno Augustin as Treasury Secretary.
Tarcisio Godoy, a Banco Bradesco executive who worked previously with Levy in government, will take the No. 2 position at the finance ministry.
President Dilma Rousseff appointed Levy, a former banker, in an attempt to calm investors worried over her administration's heavy intervention in the private sector and deteriorating economic fundamentals. Levy is a fiscal conservative known for slashing spending during his 2003-2006 stint at the treasury.
The administration has already announced cuts in subsidies to public banks, higher interest rates at state development bank BNDES and limits to pension and unemployment benefits. Continuación...