‘It is impossible to approve Budget without Emergency PEC’, says Rodrigo Maia

'It is impossible to approve Budget without Emergency PEC', says Rodrigo Maia

The mayor, Rodrigo Maia (DEM-RJ), said in the late afternoon of this Thursday (15.out.2020) that he thinks it is impossible for Congress to approve next year’s Budget without having voted on the call Emergency PEC (proposed amendment to the Constitution), which gives the government the possibility to cut mandatory spending when spending reaches a certain level.

The mayor, Rodrigo Maia, during an event at the Congress on administrative reform

© Sérgio Lima / Poder360 – 8.out.2020
The mayor, Rodrigo Maia, during an event at the Congress on administrative reform

“In my view, it is impossible for you to have the Budget approved for 2021 this year if the constitutional amendment is not approved. In my view, it is a very big risk for the government ”, declared the Mayor.

Maia spoke during the event “BMG Economic Scenario: the role of the Legislative Branch in the economic recovery”, promoted by the BMG bank. The deputy recalled that his first job was at the institution.

He said that it may be necessary for the Legislature to work in January, when congressmen are normally in recess. In the optimistic scenario, Maia said, the Senate would analyze the PEC Emergency in 15 days after the 1st round of municipal elections, scheduled for November 15. Then, the House would approve between Christmas and New Year.

Chances are that the discussion will start only after the 2nd round of municipal elections. In this case: “It will force the Parliament to make a self-call to work in January”said Maia. ”The government’s decision to push after the elections limits our calendar enormously, declared the Mayor.

The emergency PEC makes it possible for server salaries, for example, to be temporarily reduced. This would cause political wear and tear for the government and supporters of the proposal, who need to help campaign for political allies in contention.

Maia said that this is an effort to implement a minimum income program to replace the emergency aid paid by the government during the pandemic. He says, however, that the idea should be more comprehensive:

“Our challenge is not only to find resources for 1 minimum income program, but the ideal was to achieve savings greater than 1 minimum income program so that we can already start signaling another trajectory in terms of public spending”, declared the Mayor.

That would give “A certain tranquility and an expectation for long-term investors for Brazil”, in the words of the deputy. Maia has argued that the Emergency PEC needs to be the top priority of Congress.

Speaking to the public connected to the financial market, where he transits naturally, Maia again defended the maintenance of the public spending ceiling. The mechanism, approved during the Michel Temer administration, limits the increase in expenses to the rate of inflation.

“It is clear that it is not easy to deal with retirement deindexation, salary allowances, freezing food vouchers for employees. None of this is easy. But they are the only ways to face the spending ceiling ”, declared the Mayor.

Maia stated that he is concerned about the scenario of drastic reduction of expenses from 2020 to 2021, but that there would be no other possible conduct. This year, the government may spend more than expected because of the pandemic.

The mayor also said it is possible to vote on tax reform in 2020, if there is an agreement with the government. He also returned to declare that the administrative is for the next year. According to him, changes in the foreign exchange market and of cabotage transport.


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