Temer States Brazil is on Course to Regain Investment and Credibility, Reports Reuters

By Lisandra Paraguassu

BRASILIA (Reuters) – Interim President Michel Temer is optimistic that the upcoming conclusion of the impeachment trial for suspended President Dilma Rousseff will significantly enhance investment and confidence in Brazil, as well as aid in restoring the nation’s creditworthiness.

During a meeting with foreign reporters on Friday, Temer expressed his expectation that the Senate will finalize the trial of Rousseff by August 25 or 26. He believes that confirming him as president for the remainder of her term, which extends to 2018, would be beneficial for the country.

"The world needs to know who the president of Brazil is. The impasse weakens the country," he stated.

Temer, who served as Rousseff’s vice president until he assumed the presidency during her trial in May, stated his confidence that the Senate will convict her on charges of violating budget laws, while also highlighting his administration’s achievements over the past two months. Rousseff has denied any wrongdoing.

He anticipates that his proposed cap on public spending will pass Congress this year; however, he acknowledges that more profound reforms in pension and labor laws will face challenges and require additional time.

Temer mentioned that he has fostered political stability by garnering support in Congress, which is essential for implementing his economic reform agenda. He has avoided any spending that could worsen Brazil’s dire fiscal conditions.

According to him, actions taken by his economic team, led by Finance Minister Henrique Meirelles, have restored some level of confidence, suggesting that Brazil may regain its investment-grade credit rating that it lost last year.

As an indication of renewed investor interest, Temer pointed to the significant $1.8 billion acquisition of a controlling stake in Brazil’s largest power distributor by a major Chinese state-owned utility.

Temer hopes Congress will endorse his critical macroeconomic strategy of establishing a constitutional amendment to cap public spending for a decade by the end of the year.

His transitional government has thus far avoided implementing unpopular austerity measures to prevent jeopardizing the impeachment proceedings against Rousseff, who is often blamed for the downturn of Brazil’s previously strong economy.

If Temer is confirmed as president, his government is likely to pursue deeper reforms to address the budget deficit, particularly revamping Brazil’s pension system, which would necessitate longer working years for citizens.

He aims to steer Brazil out of its most severe recession since the 1930s by encouraging private investment through public-private partnerships, modernizing infrastructure, selling state assets, and opening sectors like oil, gas, and aviation to foreign investors.

"It is astonishing how many unproductive real estate assets are owned by the state," he remarked.

Temer’s administration also supports more flexible regulations within the Mercosur trade bloc, which includes Brazil, Argentina, Uruguay, and Paraguay. He argues that the current structure has hindered Brazil from negotiating trade agreements with other countries.

"We are not opposed to Mercosur, but we need to make adjustments for greater flexibility. Brazil cannot remain constrained and unable to pursue bilateral agreements," he explained.

Mercosur has postponed handing the rotating presidency to Venezuela, its newest member, which is grappling with severe economic challenges amid political turmoil.

Temer indicated that he will not object to Venezuela’s leadership of Mercosur, provided it meets the necessary membership criteria, which it has reportedly failed to comply with since its accession four years ago.