Brazil to cut spending, keep social programmes: New finance minister

Meirelles (above) is known for restoring market confidence during his tenure at the central bank from 2003 to 2011, unlocking an economic boom.
Meirelles (above) is known for restoring market confidence during his tenure at the central bank from 2003 to 2011, unlocking an economic boom.PHOTO: REUTERS

BRASILIA (AFP) - Brazil's new Finance Minister Henrique Meirelles said on Friday his priority is to cut government spending, but pledged to keep funding for social programmes "for those who need them."

"The priority right now is controlling public spending," Meirelles told a press conference, a day after interim president Michel Temer took over from Dilma Rousseff, ending 13 years of leftist rule in Brazil as she was suspended by the Senate to face an impeachment trial.

Temer, a centre-right veteran backed by the business world, has vowed to get the government's books in order and restore confidence in the Latin American giant's economy, currently mired in its worst recession in decades.

But his opponents are ready to pounce if he cuts the popular social programmes introduced by Rousseff's Workers' Party, which helped lift tens of millions of people from poverty.

"Social programmes that represent smaller amounts in the budget but are fundamental for those who need them will be kept," said Meirelles, a former central bank chief under Rousseff's predecessor and mentor, Luiz Inacio Lula da Silva.

But he warned: "Maintaining a social programme doesn't mean maintaining the misuse of a social programme. We will make a rigorous evaluation of how social programmes are being used."

Meirelles was known for restoring market confidence with orthodox monetary policy during his tenure at the central bank from 2003 to 2011, unlocking an economic boom.

He said it would take time to hash out the details of the new government's economic policy.

"It's normal for people want to know our first (economic policy) measure. But the government just started today and we're just getting access to the numbers today," he said.

"It's important that policies... be announced when they are mature and ready to be adopted by Congress."

He said he would announce his team on Monday.