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Strategies & Market Trends : Telebras (TBH) & Brazil -- Ignore unavailable to you. Want to Upgrade?

To: lebo who wrote (9344)	11/3/1998 2:00:00 PM
From: Steve Fancy	Respond to of 22640

Brazil's Malan Defends Fiscal Plan In Chamber Of Deputies Dow Jones Newswires BRASILIA -- Brazilian Finance Minister Pedro Malan addressed the Chamber of Deputies, or lower house of Congress, presenting the government's three-year Fiscal Stability Plan on Tuesday. Malan, who started to talk a short while ago, said he would first sketch the international situation which led to the financial turmoil which hit Brazil beginning September. The minister said he would then describe the achievements in the economic field since President Fernando Henrique Cardoso took office for a first term in 1995, followed by detailing the fiscal plan. The fiscal program was made public by Malan on Oct. 28 and applies to the period 1999-2001. It aims at saving the government 28 billion reals (BRR) ($1=BRR1.19) in 1999 alone and includes a serious of tough spending cuts and a number of controversial tax increases. The plan has to be approved by Congress before it can be implemented. Market sources fear that legislators might insist on several changes which could water down the government's proposals. Last Thursday Malan already officially handed the plan to Congress followed by a four-hour hearing before three Senate committees. In his speech to the Chamber Malan attacked what he termed "incomplete and simplistic" comparisons between Brazil's public accounts and those of other countries. The minister said that Brazil's statistics on public accounts include not only the federal government's accounts, but also those of the Central Bank, the Treasury, all the states of the federation, as well as 5,520 city governments as well as of all public-owned companies on all three levels of government. The accounts also include and specify what he called "skeletons of the past". "Brazil's accounts figures are of the greatest transparency. This can't always be said of other countries and certainly not of the majority of developed nations," Malan said. "It would therefore be extremely simplistic and unfair to make comparisons in order to attack Brazil's policies," he said. Replying to questions of members of a special Chamber committee created to analyze the fiscal plan, Malan predicted that "interest rates will go down". "Brazil's interest rates are unsustainable the way they are now," Malan warned. The Central Bank's assistance rate, or Tban - the rate at which the monetary authority lends money to banks - currently stands at 49.75% since Sep. 10 when they were raised from 29.75% by the Monetary Policy Committee in the wake of the global financial turmoil. "We will lower interest rates. But we will do so in a responsible and credible manner," the minister asserted. He said that simply lowering interest rates by decree would be "a sign of weakness". Malan added that ignoring that structural changes have to be carried out first, would be "ostrich policy".