Bolsonaro will sign $10.7 billion coronavirus package but wants public pay freeze

BRASILIA (Reuters) – Brazil’s President Jair Bolsonaro said he will sign off on Thursday or Friday a 60 billion-real ($10.72 billion) federal aid program for states and cities hit by coronavirus, but asked governors for support freezing public sector pay increases.

The bill to distribute federal money to states and municipalities was approved by Congress earlier this month. However, Bolsonaro has not signed off on it due to pressure from Economy Minister Paulo Guedes, an avowed free-marketeer who wants more fiscal austerity.

Bolsonaro is under growing pressure for his handling of the outbreak, which looks set to destroy the Brazilian economy and threatens his re-election hopes. In the coming days, Brazil is likely to become the world No. 2 in terms of confirmed coronavirus cases, behind only to the United States.

Nearly 19,000 have died so far from the virus in Brazil, with 291,579 confirmed cases. The true number of infections and deaths is likely to be higher as Brazil has not been carrying out widespread testing.

Bolsonaro’s relationship with governors and mayors has grown increasingly bitter. The president is angry over shutdowns they have implemented to stop the virus’ spread and argues that keeping the economy running is more important.

In return for signing off on the aid package, Bolsonaro asked governors for their backing in specific measures freezing public sector pay increases for two years.

Speaking later on Thursday, Bolsonaro said it was normal for governments to begin to lose some popularity after more than a year in office.

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