Exclusive: Brazil opposition leader will seek economic reforms

RIO DE JANEIRO Mon Nov 1, 2010 1:29am EDT

Presidential candidate Jose Serra (R) of the PSDB party and Senator Aecio Neves attend a campaign rally in Belo Horizonte October 30, 2010. REUTERS/Emmanuel Pinheiro

Presidential candidate Jose Serra (R) of the PSDB party and Senator Aecio Neves attend a campaign rally in Belo Horizonte October 30, 2010.

Credit: Reuters/Emmanuel Pinheiro

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RIO DE JANEIRO (Reuters) - The new de facto leader of Brazil's opposition, Aecio Neves, says he will challenge the government by putting together his party's own list of legislative proposals that will include economic reforms sought by many investors.

Neves, a senator-elect from Minas Gerais state, vowed to work "responsibly" with President-elect Dilma Rousseff, who comfortably won the presidential election on Sunday against the candidate of Neves' centrist PSDB party, Jose Serra.

Yet Neves told Reuters he does not intend to give Rousseff an easy ride.

He plans to convene opposition lawmakers soon after Rousseff takes office on January 1 and put together a competing agenda by February, signaling a new, more aggressive strategy by an opposition that mostly avoided direct confrontation with her popular predecessor, President Luiz Inacio Lula da Silva.

"Brazil is mature enough for a new approach," Neves said. "We have to be firm. We're willing to negotiate, of course ... but we cannot let the executive impose everything, as if this were a monarchy."

Neves, a senator from Minas Gerais state and the popular grandson of a beloved Brazilian ex-president, made the comments in an interview last week at his Rio de Janeiro home. He said they were only to be made public if Serra lost the election.

The PSDB and its allies will be vastly outnumbered in Congress once Rousseff takes office, making it difficult for them to push any kind of agenda. Neves' comments appeared to be an effort to stake out a more market-friendly, activist stance that will help his party stay relevant in coming months.

Neves declined to specify which reforms he will seek, saying he would first need to consult with other leaders.

Yet he indicated he could favor some combination of changes to Brazil's onerous tax load; modifications to labor laws that make it extremely difficult for companies to hire and fire workers; or budget cuts that could help reduce some of the world's highest interest rates.

"These structural reforms need to be done to keep Brazil's economy growing," Neves said. "Lula should have done them. He didn't. But the time to do them is now."

PSDB "HASN'T BEEN GOOD IN OPPOSITION"

Rousseff has said she will make tax reform a priority, but her advisers say other major structural changes are probably unnecessary because Brazil's economy is booming.

Neves, 50, is now the PSDB leader with the biggest national profile following the defeat of Serra, whose political career may be over. Serra has now lost two presidential elections, and Neves is the early favorite to be his party's candidate at the next presidential election in 2014.

The PSDB will hold powerful governorships in at least four states, including the two most populous: Sao Paulo and Minas Gerais. Yet the party will likely have to remake itself in coming years to overcome its elitist image at a time when Brazil's burgeoning lower-middle class is dominating politics and the economy.

Neves spent much of the interview railing against the concentration of tax revenues in the hands of the federal government during Lula's eight years in office -- a line of argument that could help win him allies in local and state governments outside the PSDB's traditional sphere.

"The PSDB hasn't been good in opposition. We have been reluctant to criticize," Neves said. "That will change."

(Editing by Todd Benson and Kieran Murray)

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