By Marcela Ayres
BRASILIA (Reuters) – Brazil’s Economy Minister Paulo Guedes on Thursday called for calm to face the growing sense of crisis, saying the government hopes to reach agreement with lawmakers for a 10 billion reais ($2.05 billion) package to fight the spread of coronavirus.
His remarks come a day after Congress overturned a presidential veto, which will see spending on social assistance for elderly and disabled people cost an extra 20 billion reais ($4.2 billion) this year.
The surprise vote heaps further fiscal pressure on the government, which is trying to rein in spending to meet budget targets amid increasing financial and economic instability caused by the coronavirus pandemic.
“Both sides (executive and legislative) realized this quickly … there’s a mutual understanding again and I think we will settle this,” Guedes said after a hastily-arranged meeting with key members of Congress on Wednesday.
He also reiterated his economic team is working “with complete calm” despite the surge in global market volatility after U.S. President Donald Trump’s decision to ban flights to United States from Europe.
“We have the capacity to face any undue escalation of the crisis, all this anxiety in the foreign exchange and stock markets,” he told journalists at the Economy Ministry in Brasilia.
Guedes repeated his plea that the current crisis be used as an opportunity to press ahead with the government’s economic reform agenda, which he claims will create jobs, raise incomes and kickstart the economy.
Guedes expressed regret at Congress’s vote late on Wednesday that threatens the government’s budget goals, arguing that it undermines efforts to get the economy growing faster.
“Now that we have started to take off, are we going to crash the plane down ourselves?” he said.
Asked about the dollar’s surge on Thursday above 5.00 reais and his comments last week that this would only happen if the government “screwed up,” Guedes called for all the key players in Brasilia and beyond to come together.
“I wasn’t referring to just me or the government. No. It’s all of us: Congress, Senate, Chamber, presidency, ministers, public opinion informed by the media,” he said.
(Reporting by Marcela Ayres; Writing by Gabriela Mello and Jamie McGeever; Editing by Chizu Nomiyama and Marguerita Choy)