Political Risk Latin America Blog @PolRiskLatam

First major legislative victory for Rousseff: keeps minimum wage on target

Posted in News and Articles, Political Risk by politicalrisklatam on February 17, 2011

by Merco Press News, February 17th, 2011.

Brazil’s Lower House approved Wednesday a government proposal to limit a minimum wage increase to 545 Real a month, handing President Dilma Rousseff her first major legislative victory.The proposal will be voted on in the Senate next week, where it is expected to be approved.

A bigger rise, as sought by labour unions, could have derailed Rousseff’s drive to rein in public spending and tame inflation that hit a six-year high near 6% last year as the economy boomed. The government last week announced 30 billion USD in budget cuts for 2011.

Rousseff might come under growing pressure to backtrack on some of those cuts and has already signalled she may fall short of pledges for sweeping economic reform.

In theory, the government holds a comfortable majority in both houses of Congress. But due to weak party loyalty, it has had to cajole and court coalition members, including its own Labour minister.

The result by a strong majority in the Chamber showed Rousseff’s ability to harness her coalition even on issues sensitive to her constituents. (continue reading… )

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