Jair Bolsonaro promulgates the privatization of the electricity giant Eletrobras and cancels social protection for those laid off

The president of Brazil, Jair Bolsonaro, promulgated on Tuesday the law that privatizes the state-owned Eletrobras, the largest electricity company in Latin America, with some vetoes that allow the elimination of social protection for one year for workers who are dismissed, which had been approved. by Congress.

The sanction of the law was published in the Official Gazette of the Union and the 14 vetoes applied by Bolsonaro configure a message to the financial market, which demanded a greater reduction of demands on the future new shareholders of Eletrobras.

Consumer entities consider that the cost of electrical energy will be 15% more expensive that the current one with privatization, as a result of the ruling party in Congress, with the help of right-wing opposition liberals, have withdrawn price impact control measures.

The Government, on the other hand, indicates that the tariff can be reduced by up to 7.36%, although the privatization occurs at a difficult moment of hydroelectric energy in Brazil, its main source, as a result of worst drought in 91 years in the southern and southeastern basins of the country, including that of the Paraná River.

Eletrobras, the largest electricity company in Latin America. Photo: DPA

The law determines that the privatization will be through the sale of shares in the company, which has open capital and is listed on the São Paulo Stock Exchange, even though it is state-owned: the plan is for Eletrobras to stop having 60% of the share package and reduce it to Four. Five%.

Bolsonaro, with the enactment of the law, withdrew all social coverage due to layoffs that privatization will generate that Congress, including its official base, had articulated in a forceful message to the financial market in the midst of the worst popularity of his term and with projections of not being reelected next year.

The president prohibited the future dismissed from acquiring shares in the company at a discount as part of their severance pay and also eliminated the clause that allowed the future laid off could be employed by other companies or public sector bodies linked to energy for “increasing costs.”

The first attempt to privatize Eletrobras had been between 2016 and 2018 during the administration of Michel Temer, whose agenda for the sale of public assets deepened with the arrival of Bolsonaro with his Minister of Economy, Paulo Guedes, an ultra-liberal from the School of Economics from the University of Chicago that vindicates Ronald Reagan, Margareth Thatcher and Augusto Pinochet, for whom he worked in Chile in the eighties.

Bolsonaro also vetoed that the Senate should evaluate the directors of the National Electric System Operator, who is responsible for coordinating the entire generation and transmission network in the country.

Selling Eletrobras It is carried out through a share package, as was also the case with the service station giant of the oil company Petrobras, called BR Distribuidora, today in the hands of investment funds that own the majority of the shares.

The Government plans that Congress approve at the end of the year the sale of the state-owned Correios, the largest logistics company in Latin America, founded more than three centuries ago by the Kingdom of Portugal, through an auction, in a business in which Officially, officials admit interest from the Argentine multinational Mercado Libre and the American Amazon, as well as local Brazilian players.

The president of the opposition Workers’ Party, Gleisi Hoffmann, had said that in case she wins the 2022 elections Lula da Silva was going to review measures like the sale of public companies.

With information from Télam

AFG​

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