Brazil considering legislation for special spending powers in emergency -economy ministry source

BRASILIA, Oct 7 (Reuters) - Brazil’s government is looking into inserting a clause into upcoming legislation that will trigger a national state of calamity and loosen budget constraints if the public finances are hit by an emergency event like pandemic or war, an economy ministry source said on Wednesday.

The clause, which would be included in the “Federative Pact” reform bill revamping the financing ties between federal and local governments, would give Brasilia more leeway to turn on the fiscal taps in times of crisis without breaking its “spending cap” rule, like it did this year. (Reporting by Lisandra Paraguassu Writing by Jamie McGeever Editing by Chris Reese)

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