Greek-style Austerity Coming to Brazil
Whatever remained of Greece’s economy after the crisis evaporated as the country adopted IMF and Troika austerity polices which today, the very same IMF admits were a mistake.
The only goal that austerity measures were able to accomplish in Greece was the complete transfer of the country’s resources and treasures to the Elite that ran away with them for pennies on the dollar.
The same scenario is presented now in Brazil, where the government of Michel Temer has passes a new package of austerity measures that will be applied sooner rather than later, and that are expected to squeeze the life out of the Brazilian economy.
Although it is true that Brazil has lots of wasteful spending, much of which is part of keeping up one of the largest bureaucracy in the world, the plan proposed and adopted by the government is far from being a solution to such wasteful spending.
Congress voted on Tuesday to approve the most severe fiscal adjustment in its recent history: since its current constitution was approved in 1988, a measure as strong as that previously known as PEC 55 has not been seen.
The proposal was the reason of the demonstrations in the last few weeks as the star project of the Government of Michel Temer: the reform that dramatically reduces the ceiling of the public expenses during the next 20 years, was being considered for approval.
This amendment to the constitution was approved by the Senate by 53 votes – only four more than the minimum required to alter the charter – and 16 against, after a process of more than a month and a half of false and controversial steps.
Beginning next year, public investments will be limited for five terms: expenses will only be increased as determined by inflation.
The Brazilian administration will not be able to raise the salary of its workers, hire new officials or grant fiscal incentives. These are three carbon copy measures that were adopted in Greece at the beginning of its austerity program.
In the two most sensitive areas, education and health, the new limit will only come into force in 2018, but it does not cease to imply an existential change in the Brazilian Administration. Up until now, its Constitution established a floor of expenses in these matters, not a ceiling.
The government of Michel Temer always wanted to make clear that the executive they replaced, the Workers’ Party, concentrated all the corruption and that they represented the alternative. Since then, they have had to deal with various corruption accusations.
The Minister of Culture resigned in November, claiming that another minister had pressed him, on behalf of Temer, to benefit a land where he had a millionaire apartment.
The president of the Senate, of the same party, was dismissed for corruption and then reinstated without proving his innocence.
Now, Temer’s name and those of many close friends appear in the confessions of several executives accused of corruption.
The tight vote is a reflection of an increasingly undeniable situation: the government of Michel Temer, who came to power in August only after the impeachment to Dilma Rousseff, does not have the authority or support it needs to govern.
This executive had tried to present itself as one of wisdom and fiscal responsibility, a bitter but necessary medicine for the country to leave the serious economic crisis that it is going through.
But since then he has not been able to avoid the flood of accusations of corruption that spill over to more and more of its members.
Temer’s government has hit a new low in popularity, 10% according to the latest Datafolha survey. Ehen he took office, the government had a popularity of 14%, and many senators who had already shown loyalty to The PEC 55 have used it now to show their disagreement.
“We also did not have to win on penalties: we did not win 5 to 0 but we won from 5 to 3. The important thing is that we have won,” Romero Jucá, the government’s leader in Congress explained.
Before the voting began, the tiny opposition party already warned that it would appeal the result at the Supreme Court.
The truth is that so far none of the many attempts to bring the matter to the Supreme Court has gone very far, but the left insists that the new law is unconstitutional.
“It is folly: the citizens ‘Constitution has stopped protecting its citizens,” lamented Jorge Viana of the Workers’ Party. Vianna’s statement is a reflection of what most Brazilians believe and desire: A nanny State that takes care of everything and everyone. That desire is one of the most powerful reasons why corruption can’t be outrooted from the heart of the nation.
As long as the population supports a nanny State, there will always be room for accpeting corruption as supposed to dealing with and exterminating it. People in Brazil have, for a long, long time, been tolerant to corruption, as long as they get their “fair share” of the big pie.
As everyone in Brazil knows, the country has more of a corruption problem than an economic or fiscal problem. Austerity will not solve the economic problem, because the government already collects enough in taxes to run the nation comfortably.
The problem now is the same as it has always been: Corruption. Austerity does not fix corruption. Accoutability does. But there is nothing in the new proposal to curtail corruption and the Brazilian population do not really want to deal with corruption, because here in Brazil corruption is the people’s way of life. Reducing or eliminating corruption would be equivalent to taking the life out of the millions of people who love the State an who wanted it to continue controlling their lives.