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Brazilian President Dilma Rousseff has signed the nation’s 2016 budget but has vetoed over 50 items on the bill, including reductions to her flagship social program and a ban on state foreign financing for some projects.
The government’s official gazette, Official Journal of the Union, reported that the President signed the so-called LDO law Thursday after Congress approved the legislation last month.
Months of negotitations between lawmakers on the budget were further heightened after Rousseff failed to meet deficit-reduction targets that almost led to a government shutdown.
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Rousseff, now in the second year of her second term in office, used her power of veto to reverse a congressional ban on the approval, disbursement and refinancing of existing or new loans by state development bank BNDES to help Brazilian companies fund investments outside the country.
The Worker’s Party leader rejected the proposed changes in individual disbursements to beneficiaries of Brazil's flagship Bolsa Familia anti-poverty program.
Rousseff vetoed the item because the increase would have jeopardized the viability of the program which provides cash payouts to the poorest Brazilians.
"Had it been authorized, the proposed readjustment, because it was not compatible with overall spending limits, would have necessarily meant a reduction in beneficiaries of the 'Bolsa Familia' program," a government spokesperson told the Official Journal of the Union.
Local reports also say she overruled that decision as she felt the ban could prevent local corporations from competing globally.
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GDP has shrivelled; the budget deficit has swelled. A recent history of Brazil's economy https://t.co/kUtWrA1vww pic.twitter.com/5vVn5sm1FL
— The Economist (@EconAmericas)
December 2, 2015
The government has yet to give more detailed explanations to the reasoning behind the vetoes however Eunício Oliveira, the leader of PMDB party in the upper house, told newspaper O Globo that the overruling "could create more problems" for the president.
Rousseff’s relationship between lawmakers has become fractured in recent months, with right-wing parties attempting to launch an impeachment process of the president for alleged involvement in the corruption scandals embroiling the state oil firm, Petrobras. The Brazilian president herself has not been implicated in the scandal, although other politicians including PMDB leader Eduardo Cunha – who attempted to launch the impeachment process against Rousseff – have been accused of involvement in the scheme.
Market specialists have projected a 2 percent dip in the economy this year after a 3.5 percent plunge in 2015. The government have cited the fall in commodity prices as the primary reason behind Brazil’s economic downturn.
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