Brazil's Economy Minister Paulo Guedes criticized lawmakers' changes to his pension overhaul proposal, fueling tension in Congress just as the government seeks support to approve the controversial bill.
The modifications proposed at a special lower house committee represent a setback to the reform, according to Mr. Guedes, who accused lawmakers of giving in to public servants' pressure. Brazil's Congress isn't interested in implementing a new pension system, he said.
"They showed that they aren't committed to future generations," Mr. Guedes told reporters in Rio de Janeiro. "The old pension system is winning."
Mr. Guedes' comments come one day after the rapporteur of the bill at the committee presented modifications that included scrapping plans for individual savings accounts, a point the minister has long touted. The pension reform is the centerpiece of President Jair Bolsonaro's efforts to cut debt and get Latin America's largest economy back on track.
Mr. Guedes' remarks contrasted with those made earlier by Bolsonaro — who said lawmakers can modify the proposal as long as they keep most of the intended savings — and drew an immediate rebuke from the head of the lower house committee where the changes were proposed.
"Investors liked the changes, too bad Guedes didn't," deputy Marcelo Ramos said. The statements come at a crucial moment for bill in Congress but "won't prevent our work on the reform," he added.
Brazil's real fell to an intraday low following Guedes' remarks. In early afternoon trading, the currency was down 1.6% against the U.S. dollar, the biggest decline among 24 emerging market currencies tracked by Bloomberg.
The government's proposed pension reform aims to save government coffers over 1 trillion reals ($256.4 billion) in 10 years by toughening access to benefits. The legislation may also help Brazil regain the investment-grade status it lost in 2015 as fiscal accounts worsened. Lower house Speaker Rodrigo Maia has said the bill could go to a floor vote before congressional recess in mid-July.
