New threats to Eletrobras’ privatization and sector new rules
Market expects government to initiate Eletrobras privatization process and to propose new guiding rules for the electricity sector.
A certain frustration was caused by the postponement of airports privatization, which are now scheduled to occur only in 2019.
This way, Eletrobras’ privatization is the last asset that Temer could forward to Congress in the form a Provisional Measure, what it is to be done in the coming weeks.
However, a political debate is in course, as many congresspeople criticeize what they consider an excessive number of provisional measures (PM) being sent by Temer’a administration to Congress.
The chairman of the House of Representatives, Rodrigo Maia, said that he will simply refuse to accept putting into vote any new provisional measures, until there is an appreciation of a Proposal of Amendment to the Constitution (PEC) that changes the rite of processing of provisional measures.
Current rule provides for a 60-day validity for a Provisional Measure, extendable for anoher 60-day period. If the new proposal is approved, provisional measures will be valid for 120 days if none of the houses vote the matter within that term.
In order to vote for a Amendment to the Constitution it is necessary the approval by two-thirds of House Representatives (308 votes).
If Rodrigo Maia complies with his threat of not accepting more provisional measures, the government will find itself in an extremely difficult situation, as there is only two months until the end of the legislative year ( December 22).
The reforms of the electricity sector were not even sent to Congress and 14 provisional measures that had yet not been aproved are under the risk of losing their validity, including those defining the new mining legal framework.