Protesters in São Paulo denounce Temer. Photo: AP

Fully installed in Brazil's Planalto executive headquarters, interim President

Michel Temer has launched the neoliberal plan he promised. Under the pretext of revitalizing the country's stagnant economy, the representative of the Brazilian Democratic Movement Party (PMDB), has presented Congress with a budget cut in the form of a Constitutional amendment. The proposal has already been put to a vote twice in the Chamber of Deputies and is now awaiting its turn in the Senate. Chances are it will go into effect in 2017.

The budget reform at issue imposes a ceiling on public spending for the next 20 years, and was justified by Temer as a necessary step to attract foreign investment and emerge from the current recession which has eroded the economy, along with a high rate of inflation, a reduced GDP, and the budget deficit, faced since 2014, which has reached 170 billion reales, equivalent to 50,000 million dollars. The situation in Brazil is not only a result of errors, but of the energy wasted on the long impeachment process that led to the removal of Dilma Rousseff from the Presidency.

If the amendment is ultimately approved, public investment in sensitive areas like health and education will be affected, which has provoked widespread condemnation on the part of trade unions and social movements. For weeks now, street protests have been taking place to denounce what many see as an attack on what was accomplished during the 13 years of Workers' Party (PT) administrations. Temer himself has said that he will only review social projects launched by the PT, such as Bolsa Família (aid to low income families) and Minha Casa Minha Vida (housing), but his budget cuts will have a negative impact on these since the state funds, which maintain them, would be limited.

For now, the proposal has been well received by the International Monetary Fund. During a recent meeting in Washington, IMF Director Christine Lagarde told Brazilian Treasury Minister Henrique Meirelles, that she was encouraged by the focus and direction of recent measures taken by the Brazilian government.

The interim PMDB administration is also considering changes to university education. Hundreds of university campuses were occupied by students protesting the elimination of required courses in subjects such as Sociology, Philosophy, Art, and Physical Education, and other cuts.

Likewise under consideration is an end to the exclusive right of state oil company Petrobras to drill in the Santos fields (southwest of São Paulo) and the Campos basin (off the coast of Río de Janeiro). This would allow foreign transnationals to become the principal operators in these giant oilfields, which according to Petrobras, are surpassing a million barrels a day, as of May this year.

For the time being, Temer is defending his neoliberal agenda, and says he wants to "tighten belts" in Brazil, even though this means that the social foundation laid by previous governments may be undermined.