UPDATE 1-Brazil's Levy urges Congress to approve austerity package

miércoles 14 de octubre de 2015 16:39 GYT
 

(Adds Levy and opposition lawmaker comments)

By Alonso Soto

BRASILIA Oct 14 (Reuters) - Swift approval of an unpopular fiscal austerity plan is crucial for the Brazilian economy to recover from its worst crisis in decades, Finance Minister Joaquim Levy told lawmakers on Wednesday.

Speaking in the lower house of Congress, Levy appealed to lawmakers to support a package of tax hikes and spending cuts aimed at plugging a gaping fiscal deficit.

Levy said consumer and business confidence will only return after an overhaul of public accounts that dispels any doubts about the health of Latin America's largest economy going forward.

"We still have to tighten our belt and rebalance the accounts," Levy said. "That is important and indispensable for us to see growth in the future."

President Dilma Rousseff is struggling to muster enough support for the austerity package as her coalition in Congress wavers in the face of a massive political corruption scandal and mounting calls for the president's impeachment.

Levy told Reuters on Saturday that he will not leave the government despite the political turmoil and is determined to implement "a long agenda" to fix an economy once seen as a standout by foreign investors.

Levy, a University of Chicago-trained economist, faced harsh criticism from opposition lawmakers as well as allies of the government, many whom oppose the revival of an unpopular tax on financial transactions known as CPMF.

The tax would raise 30 billion reais ($7.86 billion) a year, or about half of the entire fiscal package proposed by the administration to squeeze out a fiscal surplus next year.

"Forget about the CPMF. That will never be approved," Arthur Maia, from the center-left opposition party Solidariedade, told Levy from the floor of the house. ($1 = 3.8150 Brazilian reais) (Reporting by Alonso Soto; Editing by Chris Reese and Christian Plumb)