Brazil Military Blocks Plan to Freeze Wages
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SAO PAULO — Brazil’s military has blocked a Finance Ministry plan to freeze public sector wages for three months, ministry officials said Friday.
Finance Minister Mailson Ferreira de Nobrega had proposed the freeze as a way of containing the spiraling public deficit, estimated by economists at about 7% of gross domestic product.
The strong military opposition to a key aspect of government economic policy clearly took the ministry by surprise.
Finance Ministry spokesman Geraldo Moura said: “This is something new. It has never happened before.”
The military ruled Brazil from 1964 to 1985 and retains important political clout.
Economic analysts said Brazil’s continuing failure to curb its public spending deficit could jeopardize its attempts to reach a definitive debt accord with creditors and win new loans.
The Finance Ministry announced on Friday that it had reached agreement with its commercial bank creditors to reschedule $67.5 billion of Brazil’s total $114-billion foreign debt, the biggest in the Third World.
The split between the military and the Finance Ministry over how to tackle the internal deficit is just one aspect of a highly complex political crisis now gripping the country.
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