October 8, 2016 / 8:36 PM / in 3 years

Brazil's Meirelles says support for spending cap remains strong

Brazil's Finance Minister Henrique Meirelles attends an economics and politics forum in Sao Paulo, Brazil, September 30, 2016. REUTERS/Paulo Whitaker

BRASILIA (Reuters) - Brazilian Finance Minister Henrique Meirelles said on Saturday that a challenge by the top prosecutor’s office to the government’s landmark reform to cap public spending would not reduce support for the proposal in Congress.

A day earlier the General Prosecutor’s Office questioned the constitutionality of the proposed cap that limits spending growth to the rate of inflation for at least 10 years and recommended that Congress shelve the austerity measure.

“It is legitimate that all parties express their opinion and protect their interests,” Meirelles told reporters in Washington according a recording provided by his office.

When asked if the challenge could reduce support for the measure, Meirelles said: “I don’t believe so. This is a fair proposal that treats all federal powers equally and does not open any possibility for interference.”

The unprecedented cap is at the heart of President Michel Temer’s austerity plan intended to close a yawning fiscal gap that cost Brazil its investment grade rating last year.

Meirelles also said he is confident there will be a quorum in the lower house of Congress for a first-round vote on the legislation scheduled for Monday.

The approval of the cap, which would punish federal institutions that overspend, requires two votes in both the lower house and the Senate, needing a three-fifths majority in each.

Reporting by Alonso Soto; Editing by Bill Rigby

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