Brazil's Bolsonaro averts crisis as Senate set to back his reorganization decree

Credit: REUTERS/Adriano Machado

By Anthony Boadle

BRASILIA, May 28 (Reuters) - Brazil's right-wing President Jair Bolsonaro convinced his party to vote for a decree to revamp the executive branch on Tuesday, averting a potential crisis that had sown doubt about his ability to obtain the congressional backing he needs to push through legislation.

Bolsonaro had issued a decree the day he took office in January to cut the number of ministries to 22 from 29. That was set to expire next week if it were not confirmed by lawmakers.

But his own PSL party had planned to vote against the decree in the Senate because they were unhappy that it had been revised by the lower house to keep an anti-graft unit out of the control of Justice Minister Sergio Moro.

Failure to obtain congressional approval had risked undoing Bolsonaro's entire reorganization and throwing his government into a crisis that would have deepened concerns about the fate of an ambitious pension reform bill - the cornerstone of his economic agenda.

Lower house lawmakers last week approved the bureaucracy-slashing decree but kept the Council for Financial Activities Control (COAF) in the economy ministry, out of the hands of Moro, a former judge who jailed many politicians for kickbacks in the Car Wash scandal.

Senator Major Olimpio, the PSL leader in the Senate, had wanted the COAF to be under Moro as a tool for tracking money laundering in the banking system, and not restored to the economy ministry.

But he changed his mind after meeting with Bolsonaro. Olimpio said Moro and Economy Minister Paulo Guedes, who is leading the pension reform effort, also asked him to back down.

"In view of the requests by the president, Moro and Guedes, we cannot put the government reorganization in danger and the PSL will vote to keep the COAF at the Economy Ministry," Olimpio told reporters.

Moro, visiting Portugal, said he was disappointed his ministry would lose the COAF, but said it was a democratic decision by Congress.

Besides, he told reporters in Estoril, "we can't allow the whole government reorganization to be lost because of the COAF."

The Senate is set to vote on the decree later on Thursday. The support of the PSL means it will almost certainly pass.

(Reporting by Anthony Boadle, additional reporting by Lisandra Paraguassú in Brasilia and Catarina Demony in Lisbon Writing by Anthony Boadle Editing by Phil Berlowitz and Rosalba O'Brien)

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