Brazil risks 'bankruptcy' if reforms not passed: Temer

Sao Paulo (AFP) –


Brazil's President Michel Temer warned Friday of state "bankruptcy" if far-reaching fiscal reforms restricting public spending are not approved.

Temer, speaking at a forum in Sao Paulo, called on Congress to pass the constitutional change required to cap public spending. Without the change, he said public debt will overwhelm the country by 2024.

"Approval is fundamental for us to avoid the inflationary spiral and recession," he said. "Public debt could reach 100 percent of the GDP in 2024 or before. It would be the bankruptcy of the Brazilian state," he said in remarks carried by the official Agencia Brasil.

Brazil's worst recession for decades is forecast to end only in 2017 with weak growth.

Temer, who took over after the removal from office of Dilma Rousseff in an impeachment vote in August, says his sole goal is to restore Latin America's biggest economy to health.

To pass the spending ceiling, he will need approval from Congress, which was at constant war with Rousseff and voted overwhelmingly to eject her, automatically bringing in Temer, who was her vice president but had gone into opposition.

Temer said he was confident. "Congress today is very conscious that it needs to cooperate with the executive so that we can get out of this crisis."

He sought to reassure Brazilians about the coming austerity measures, saying "we don't want to increase the tax burden" and that the most vulnerable would be protected.

There have been signs of recovery recently, with consumer confidence rising and inflation starting to dip.

However new unemployment figures Friday showed 12 million people out of work at a rate of 11.8 percent in June to August, up from 11.2 percent in the previous three-month period.

Temer blamed his predecessors in government for the mess.

"Mismanagement of the accounts never goes unpunished. Among its victims are employment, growth and the worker's wallet," he said.