UPDATE 2-Brazil's Rousseff asks nation to back austerity plan

domingo 8 de marzo de 2015 21:36 GYT

(Adds protests during speech)

By Anthony Boadle

BRASILIA, March 8 (Reuters) - President Dilma Rousseff appealed to Brazilians on Sunday to back fiscal austerity policies, while saying that the belt-tightening will last as long as needed and results will only start showing at the end of this year.

With the economy stalled and ties with her coalition allies in disarray due to a corruption probe at state-run oil company Petrobras, Rousseff needs support for unpopular steps to reduce a gaping deficit and save Brazil's investment grade rating on its debt from a downgrade by ratings agencies.

"This is a process that will last as long as necessary to rebalance our economy," Rousseff said in a nationally televised speech marking International Women's Day. She said she expected the economy to start recovering at the end of this year.

The leftist leader said belt-tightening started with cutbacks in government spending and moved on to reducing tax breaks and subsidies for credit.

Rousseff's plans to cut unemployment and pension benefits, however, have met with resistance from within her own Workers' Party. And a decree to raise payroll taxes paid by businesses was thrown out by her main ally in the Senate last week.

That almost unprecedented congressional maneuver was a sign of how fallout from the multibillion-dollar kickback scandal at Petroleo Brasileiro SA, as Petrobras is formally known, threatens Rousseff's agenda.

The graft scandal and economic slump have hurt Rousseff's popularity. During her speech, residents in some neighborhoods of Brazil's biggest cities booed and banged on pans, calling for her to quit.   Continuación...