Brazil's lower house Speaker Arthur Lira said on Monday his main focus will now be approval of a tax reform and called on President Luiz Inacio Lula da Silva's leftist minority government to make greater efforts to win over lawmakers for the reform proposal.
After meeting with the president, Lira told CNN Brasil that the tax reform must be voted on by the chamber before Congress enters recess in July.
"I'm committed to bringing the tax reform to a vote," Lira said. "And it is crystal clear in Lula's mind that the tax reform is absolutely needed."
He said Lula planned to call a meeting with the leaders of the parties of his coalition in Congress later on Monday to address the tax reform and relations with Congress.
Lira, a conservative, was in the spotlight last week as the chamber delivered Lula a major defeat over important legislation protecting the Amazon rainforest and Brazil's Indigenous people.
The speaker suggested that Lula's honeymoon with Congress since he took office in January was coming to an end, saying: "The fuel of the president's prestige with Congressional leaders is running out."
Lira, however, denied there was "constant confrontation" with the president: "There is no arm wrestling between Lula and Lira ... but Congress is conservative and some topics are difficult to pass," he said.
Analysts at JPMorgan said in a note that the tax reform "should be another positive top-down catalyst" in addition to the new fiscal package passed by the lower house earlier this year, reiterating their "Overweight" rating on Brazil.
"From a policy standpoint, Congress has been the economic policy guardian, leading to approval of needed issues and blocking the reversal of past reforms," they said.
Brazil's real gained 0.7% against the dollar on Monday.
(Reporting by Eduardo Simoes; Editing by Steven Grattan and Marguerita Choy)
