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Brazilians withdraw stimulus plan cash

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RIO DE JANEIRO: Brazilians buckling under austerity measures had a novel experience — an invitation to put extra cash in their pockets. Salaries in Brazil include a mandatory contribution to a savings fund which is meant to remain untouched except in case of unemployment, sickness or home buying. But President Michel Temer’s government allowed Brazilians from Friday to stick their hands in the cookie jar. Temer is trying to wrestle the floundering economy out of a two year recession.


Suspending the requirement for compulsory reserves is meant to get Brazilians back in the spending habit and stimulate the wider economy.


“Workers can take out money which they can now consume, save or invest,” the Finance Minister, Henrique Meirelles, said.


From early Friday branches of the state-run Caixa bank were filled with people eager to take the government up on its offer.


About 30 million people are eligible to withdraw from the fund, which contains some 43.6 billion reais ($13.7 billion).


Banks opened two hours early for the occasion, and within three hours 700,000 people had made withdrawals, reported G1 news site.


Monica Neves, a 42-year-old store manager, said she had about 1,300 reais ($411) stored up. In a country where the minimum wage is 880 reais a month, that’s worth something. “I’m going to pay off debts,” she said.


The government says there’ll be a lot of people like Neves, given that about a quarter of the population has debts.


Others waiting to take out their reserves echoed a common refrain across the corruption-riddled Latin American giant.


“It’s the least they can do,” said unemployed Rio resident William Souza, 58. “Give the money back to the people before they steal everything!”


The measure, which will run until the end of July, goes against the grain of the hugely unpopular government’s belt tightening policies.


Congress recently approved a 20-year budget spending freeze and President Michel Temer is trying to pass pension reform, all to impose discipline on the budget and rein in spending before the country goes bankrupt. — AFP


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