Tag Archives: Brazil

Brazil’s Temer deploys army as protesters battle police

Demonstrators take part in a protest against Brazilian President Michel Temer and the latest corruption scandal to hit the country, in Brasilia, Brazil, May 24, 2017. REUTERS/Paulo Whitaker

By Alonso Soto and Anthony Boadle

BRASILIA (Reuters) – Protesters demanding the resignation of Brazilian President Michel Temer staged running battles with police and set fire to a ministry building in Brasilia on Wednesday, prompting the scandal-hit leader to order the army onto the streets.

Police unleashed volleys of tear gas, stun grenades and rubber bullets to halt tens of thousands of protesters as they marched towards Congress to call for Temer’s ouster and an end to his austerity program.

Masked protesters fired powerful fireworks at police, set ablaze furniture in the Agriculture Ministry, and sprayed anti-Temer graffiti on government buildings.

It was the most violent protest in Brasilia since anti-government demonstrations in 2013 and fueled a political crisis sparked by allegations Temer condoned paying off a potential witness in a massive corruption probe.

The scandal has raised chances Brazil could see a second president fall in less than a year.

Police cordons held back protesters from advancing on the modernistic Congress building where the main ally in Temer’s coalition, the PSDB party, met to discuss whether to continue backing him and prepare for a post-Temer transition.

One protestor was shot and wounded, police said. Local media reported at least one other demonstrator was seriously injured by a rubber bullet to the face, while another lost part of his hand while trying to throw an explosive device at officers. The city government said 49 people were hurt.

Temer approved a decree allowing army troops to assist police in restoring order in Brasilia for the next week, giving soldiers policing powers and the right to make arrests. His office said Temer turned to the military after police were overwhelmed.

The move brought immediate criticism in a nation where memories of a brutal 1964-85 military dictatorship remain fresh.

“What are they going to do? Intervene and wage war against the people that are out there on the esplanade?” Senator Gleisi Hoffmann of the opposition Workers’ Party said on the Senate floor.

“TEMER IS NO LONGER GOVERNING”

Temer, a former vice president whose government’s approval rating is in the single digits, took office a year ago after former President Dilma Rousseff was impeached for breaking budgetary laws.

Rousseff and her supporters labeled that a “coup” orchestrated by Temer and his allies in an effort to halt a sweeping, three-year corruption probe that has placed scores of sitting politicians under investigation.

Temer defiantly refused to resign last week after the Supreme Court opened an investigation into the hush-money allegations made in plea-bargain testimony by executives at meatpacking giant JBS SA.

The accusations pummeled Brazilian financial markets on doubts Congress would pass government austerity measures meant to pull Brazil out of its worst-ever recession

Temer could be removed from office by Brazil’s top electoral court which meets on June 6 to decide whether to annul the 2014 election victory by the Rousseff-Temer ticket for using illegal money to fund their campaign.

If that happens, Congress would have 30 days to pick a successor to lead Brazil until elections late next year.

The parties of Temer’s main allies are split over whether to quit his coalition immediately or first agree on a consensus figure to replace him and save his reform agenda. The market-friendly measures are considered vital to restore business credibility and investment needed to end a two-year recession.

The PSDB, Brazil’s third largest party, announced it was staying in the government for now to make sure an orderly transition was in place if Temer has to go, party leader, Senator Tasso Jereissati, told reporters after meeting with lawmakers.

Outside, the message demonstrators chanted was clear: “Out with Temer!, general election now!”

Sonia Fleury, a political analyst at think tank FGV, said more violent protests can be expected in a country where discontent with a discredited political establishment is rife.

“We are in a very deep crisis. Temer is no longer governing. Anything he does, like call out soldiers, can only make things worse,” she said.

Unions were galvanized by opposition to a bill that would cut their power in the workplace by allowing temporary non-unionized contracts and ending obligatory payment of union dues.

“Temer can’t stay and these reforms that trample on our rights cannot advance. We want elections now,” said Dorivaldo Fernandes, 56, member of a health workers union in the neighboring state of Goias.

Leftist senators, who on Tuesday succeeded in obstructing discussion of the labor reform bill, read out a constitutional amendment in committee that would allow early general elections instead of waiting until October 2018.

But chances of changing the constitution in the midst of a political crisis were minimal.

(Reporting by Alonso Soto and Anthony Boadle; Additional reporting by Maria Carolina Marcello in Brasilia and Brad Brooks in Sao Paulo; Writing by Anthony Boadle and Brad Brooks; Editing by Marguerita Choy and Andrew Hay)

‘War on sugar’ takes toll; Asia, Brazil struggle to make up shortfall

FILE PHOTO: A worker checks the flow of sugar inside the Gandavi sugar factory, 165 km (102 miles) south of Ahmedabad, India, March 26, 2012. REUTERS/Amit Dave/File Photo

By Ana Ionova and Chris Prentice

LONDON/NEW YORK (Reuters) – The “war on sugar” being waged by governments and consumers to combat public health emergencies like diabetes is slowing growth in global demand, which along with other factors could signal a fundamental shift in consumption ahead.

Consumption may grow at its slowest pace in seven years in 2017/18, according to analyst group Platts Kingsman. It forecasts a rise of 1.04 percent, nearly half the average growth of about 2 percent per year over the last decade.

“Consumption is generally stagnating in developed countries,” Tom McNeill, director at commodity analyst group Green Pool, told Reuters.

Falling consumption in more health-conscious markets has been exacerbated by higher prices and the use of alternatives like high-fructose corn syrup in developing countries that might otherwise have made up the shortfall.

Combined with weaker demand from food and beverage makers globally, this could represent a “step-change lower” – or a fundamental shift – in global consumption, according to Tropical Research Services.

“So, it may be that the real long-term ‘trend’ rate of global sugar demand growth has changed and is now lower,” the group said in a May 7 report.

At least 17 countries and a number of U.S. cities have added an extra tax on sweetened beverages. Another 11 nations are implementing or considering similar levies.

Many are going further: France has coupled a tax with measures like banning vending machines in schools. Chile last year introduced black stop-sign warning labels on foods high in sugar, salt and fat.

Mexico is another example. With one in three adults in the country affected by obesity, the country slapped a levy on sweetened soft drinks in 2014.

Although the impact on health will take years to assess, early data shows consumption of soft drinks in Mexico has fallen by 12 percent since the tax was introduced.

“There is an increasing understanding for the need to control intake of free sugars, in public policy and in culture in general,” said Francesco Branca, director of nutrition for health and development at the World Health Organization.

“With obesity and diabetes very quickly spreading, they are trying to do something about it early on.”

The slowing pace of growth globally is adding to worries the world sugar market is headed for a surplus in 2017/18, after two consecutive deficits. [nL5N1H03Y2]

It could also curtail ambitious plans by the European Union to sharply boost output in 2017/18 in an effort to again become a net exporter, after it ends subsidies and caps on exports in October. [nL5N1H03Y2]

INDIA, CHINA AND BRAZIL

High-income countries like Norway and Canada are already seeing a decline in sugar consumption, Euromonitor figures shows. Now the appetites of developing markets, whose rapid population growth was expected to drive future growth, also appear to be waning.

Sugar sales in India, the world’s biggest consumer, are set to fall by roughly 1 million tonnes this season, the Indian Sugar Mills Association (ISMA) estimates, due to higher domestic prices and a cash crunch that followed last year’s demonetisation of high-value bank notes. [nL8N1HX4HV]

The government’s decision earlier this year to abolish a sugar subsidy for poor families also dented consumption.

ISMA expects consumption to rebound next year as production in the country normalizes and domestic prices come down, but analysts say long-term growth remains uncertain as the government mulls higher taxes and stricter labeling on sugary foods. [nL3N1GT3TU]

“If India also jumps on the bandwagon with such a levy, as the world’s biggest sugar consumer, this could be felt in global growth,” said Stefan Uhlenbrock, senior analyst at F.O. Licht.

Sugar demand also seems to be stagnating in China, the second biggest consuming country, as cheaper sweeteners like high-fructose corn syrup (HFCS) grow in popularity.

Chinese beet and cane farmers rely on state support to offset steep production costs. Imports, meanwhile, are subject to hefty duties meant to protect the industry, with an additional tariff introduced just this week. [nL4N1IO1J8]

As a result, domestic sugar prices are around double those on the world market. This, coupled with an abundance of cheap corn, has made HFCS highly competitive.

The USDA last month highlighted the decline in Chinese sugar demand when it slashed its estimates for consumption in that country for 2015/16 and 2016/17 by roughly 10 percent and signaled more modest growth than previously expected.

“People in China are still eating ice cream and drinking soft drinks,” said John Stansfield, analyst at commodity trader Group Sopex.

“It’s just the fact that these products are now increasingly made from corn syrup rather than sugar.”

Brazil, the world’s third largest consuming nation, has also seen demand growth slow over the last three years as an enduring recession slashed the incomes of many Brazilians. Consumption was growing at roughly 2-3 percent over the previous decade.

SODA AND CONFECTIONARY

Manufacturers seem to think the anti-sugar movement is here to stay, and many food and beverage companies are pre-emptively reformulating their products as a result.

Coca-Cola <KO.N> has committed to reducing sugar in its drinks, with more than 200 reformulation initiatives underway. [nL4N1CW3UT]

PepsiCo <PEP.N> also said that by 2025 at least two-thirds of its drinks globally will have 100 calories or fewer from added sugar per 12-oz serving. [nL1N1CK13C]

Nestle <NESN.S> said in 2016 it is developing technology to reduce sugar in some confectionary products by up to 40 percent without affecting the taste. [nL8N1DW1D3]

“Globally, sugar is in the spotlight,” said Sara Petersson, nutrition analyst at Euromonitor. “The regulations are increasing with time. And if they’re being smart, they’re going to tackle this in advance.”

(Editing by Nigel Hunt, Veronica Brown and Sonya Hepinstall)

Hush money scandal jeopardizes Brazil’s feeble recovery

Demonstrators shout slogans during a protest against Brazil's President Michel Temer in Sao Paulo, Brazil, May 18, 2017. The sign reads "Out Temer and Elections now!." REUTERS/Nacho Doce

By Alonso Soto

BRASILIA (Reuters) – Hopes Latin America’s largest economy could emerge from its worst-ever recession this year were plunged into doubt on Thursday after President Michel Temer was shaken by allegations he condoned bribing a potential witness.

Fears the scandal could force Temer to step down or derail his ambitious reform agenda drove the biggest daily drop in the Brazilian real since 1999, while the benchmark Bovespa stock index closed 9 percent lower.

Government officials, lawmakers and economists told Reuters the crisis surrounding Temer, 76, could slow the pace of interest rate cuts and diminish consumer and business confidence enough to extend the recession into a third year.

Central Bank data this week suggested Brazil’s economy finally grew in the first three months of the year after eight consecutive quarters of contraction. A second month of job growth in April also fueled hopes of a recovery.

“The government went from its best moment to its worst moment in a matter of seconds,” said a Temer aide, who asked for anonymity to speak freely. “Even the opposition was betting on the approval of the reforms. Now we need to reestablish normalcy.”

Since he took office following the impeachment of leftist President Dilma Rousseff a year ago, Temer has regained investors’ confidence with measures to stop hemorrhaging in public finances. The government recorded a budget deficit of more than 10 percent of gross domestic product last year.

In a defiant address to the nation, Temer insisted that he would not resign and his ministers tried to ease market alarm by promising to push ahead with reforms.

Still, the specter of renewed political uncertainty raised doubts about the recovery and senior politicians said they could not press on with reforms in the midst of calls for Temer to step down.

Senator Ricardo Ferraço, a Temer ally in charge of drafting the government’s labor reform, said he had halted his work until the political crisis was resolved.

The lawmaker sponsoring the government’s flagship pension reform, Arthur Maia, also said there was no room to advance on the legislation in the midst of the turmoil created by the allegations against Temer.

“This certainly makes approval of the reforms more difficult,” Senator Valdir Raupp, a close ally to Temer, told Reuters. “Halting legislative work is the worst path to take. We have to see how things evolve in coming days.”

CAUTIOUS CENTRAL BANK

Government officials also said they worry the crisis could hamper investors’ interest in multi-million dollars auctions of oil rights, hydroelectric plants and infrastructure projects later this year. Temer was betting on those investments to add momentum to the recovery

Risks that labor and pension reforms could stall will likely prompt the central bank to slow the pace of interest rate cuts, limiting a source of relief for businesses battered by the recession, economists said.

The sharp depreciation of Brazil’s real could raise inflation expectations and cut short the easing cycle, economists said. The real closed down nearly 8 percent at 3.38 per US dollar.

“Although there is still room to cut rates, the central bank will be more cautious on the pace of easing,” said Alessandra Ribeiro, partner with consultancy Tendencias.

“The scandal compromises the recovery, which could be much weaker than originally expected or even fizzle away.”

Earlier this week, many market economists expected a more aggressive 125-basis-point rate cut at the bank’s next meeting on May 31. Investment banks expected the bank’s benchmark Selic rate to drop below 8 percent this year.

A surge in Brazilian interest rate futures shows traders are scaling back their bets for steeper rate cuts.

For Jose Carlos Martins, head of construction industry group CBIC, political paralysis would further undermine an economy struggling with more than 14 million unemployed.

“The chaos in the markets should serve as a warning for Congress to continue with the reforms,” Martins said. “Paralysis will send a terrible message to everyone.”

(Reporting by Alonso Soto; Editing by Andrew Hay)

Brazil on edge as ex-president Lula squares off with judge Moro

Members of Workers Party (PT) attend a march before former Brazilian President Luiz Inacio Lula da Silva's testimony to federal judge Sergio Moro, in Curitiba, Brazil, May 9, 2017. REUTERS/Rodolfo Buhrer

By Brad Haynes

SAO PAULO (Reuters) – When Brazil’s former President Luiz Inacio Lula da Silva and Judge Sergio Moro meet for the first time in a courtroom on Wednesday, the contrasts – and the stakes – could hardly be greater.

One is the country’s most popular president ever and the front-runner in next year’s election – a former union leader who still whips up crowds with his fiery and folksy oratory. The other, a soft-spoken law professor who represents Lula’s main obstacle to power.

The legacy and political future of Brazil’s first working-class president are on the line as Lula faces one of the five criminal cases against him, part of the biggest corruption probe in the country’s history.

While denying any wrongdoing, Lula and his lawyers have turned his defense into an attack on Moro himself, arguing the judge’s track record in overseeing the graft probe has undermined his impartiality. Lula’s supporters are traveling from across Brazil to the southern city of Curitiba to protest outside the court.

Local media has fed expectations of a confrontation with a breathless buildup to Wednesday’s hearing. One news magazine’s cover painted the two as masked wrestlers going head to head. On another, they are boxers “Settling Scores.”

Pollster Datafolha found Moro was one of the few public figures who could beat Lula in the 2018 presidential race – though Moro denies he will enter politics.

The 44-year-old judge has avoided addressing the electoral impact of his decisions and discouraged portrayals of him as David to Lula’s political Goliath.

Lula’s testimony is just one more step in a three-year-old operation, insists Moro, who has kept lecturing public university students on criminal law as he runs the probe.

“I’m a little concerned by this climate of confrontation, these heightened expectations about something that may be totally banal,” the judge said at a public event on Monday, regarding this week’s hearing.

Moro has already sentenced dozens of businessmen and money launderers for a bribery scheme paying billions of dollars to politicians in return for public contracts, political favors and deals with state firms such as oil giant Petrobras <PETR4.SA>.

Office holders in Brasilia must be tried by the Supreme Court, so prosecution has moved more slowly against alleged beneficiaries in the ruling Brazilian Democratic Movement Party and the Workers Party, which ran the country under Lula and his successor Dilma Rousseff from 2003 to 2016.

“CLIMATE OF CONFRONTATION”

Prosecutors say Lula masterminded the scheme during his eight years in office, but Wednesday’s hearing focuses on whether he traded influence for the refurbishing of a beach condo.

On Monday, Moro began hearing testimony in a second trial against Lula, regarding 12 million reais ($4 million) of land bought by a construction firm to be used for his institute.

A conviction in either case, if upheld in an appeals court before elections in October next year, would bar him from seeking office.

While Lula’s allies are calling for tens of thousands of partisans to convene in Curitiba, Moro posted a Facebook video discouraging a rival march by supporters of the investigation.

Yet even that call for restraint stirred controversy.

“Judge Moro, who ought to be impartial, is speaking directly to his supporters. That is not normal in a democratic system. In a democracy, politicians have supporters and adversaries – not judges,” said Lula attorney Cristiano Zanin in a video response.

The exchange underscored that while both Lula and Moro face public scrutiny, the judge may have more to lose if the interrogation devolves into a contentious exchange.

A courtroom spat would stoke complaints from Lula supporters who call the investigation a political witch hunt and bolster his lawyers’ demands that another judge try the case.

Attempts at such a legal maneuver are not uncommon, said Oscar Vilhena Vieira, dean of the law school at the Getulio Vargas Foundation. In Brazil, the same judge is usually responsible for overseeing an investigation and then ruling on a case.

Yet relations between Moro and Lula’s team are especially tense amid their campaign to discredit him, which included the lawyers’ complaint to the United Nations that the judge violated Lula’s human rights during the corruption investigation.

Moro often cites the value of public support for the task force he oversees, pointing to the lessons of Italy’s “Mani Pulite” graft probe in the 1990s to show the importance of popular opinion to sustain a major corruption investigation.

“From a political perspective, there is a greater risk for Judge Moro,” said Vieira. “His rhetorical options are far more limited. He has to take great care not to fall into the traps set by Lula’s lawyers.”

(Reporting by Brad Haynes; Editing by Brad Brooks, Daniel Flynn and Andrew Hay)

Brazil readies $18.5 billion public spending plan: newspaper

FILE PHOTO: General view of a construction site of the railroad Transnordestina in the city of Salgueiro, Pernambuco state, northeast of Brazil, October 26, 2016. REUTERS/Ueslei Marcelino

SAO PAULO (Reuters) – Brazil plans to invest 59 billion reais ($18.50 billion) in public funds by the end of 2018 to accelerate the economic recovery and bolster aging infrastructure, newspaper Valor Econômico said on Wednesday.

More than a third of that, or 22.7 billion reais, would fund transportation projects, such as highways, railroads and airports, the report added, citing documents presented to ministers on Tuesday. The remaining funds would be distributed among three areas: housing, sewage and urban transit; defense; and health, education, water projects, tourism and sports.

President Michel Temer’s administration will propose the “Avançar,” or “Advance,” program to replace an ongoing plan known as PAC, Valor reported.

Representatives for the finance and planning ministries were not immediately available to comment.

Temer’s predecessor, Dilma Rousseff, introduced the PAC, or growth acceleration program, as her flagship policy in 2007 when she was chief of staff under leftist President Luiz Inácio Lula da Silva.

Economists have said the program had little effect on growth and weighed on public finances as Brazil’s economy, Latin America’s largest, slipped into its deepest recession in decades. Rousseff and center-right Temer have slashed PAC’s budget repeatedly in recent years to try to curb ballooning public debt and regain investors’ trust.

Increased public spending could make it harder for the government to plug a growing budget gap. It could also force additional austerity elsewhere at a time when the economy shows timid signs of recovery.

Temer has pursued a plan to streamline the country’s pension system to cut social security spending for years to come, triggering strong opposition. His infrastructure efforts have so far focused on privatization, with a successful airport auction in March demonstrating investors’ interest in Brazilian assets.

(Writing by Bruno Federowski; Editing by Lisa Von Ahn)

Brazil annual inflation in April likely hit lowest in nearly 10 years

FILE PHOTO: A woman looks on prices at a food market in Rio de Janeiro, Brazil, January 21, 2016. REUTERS/Pilar Olivares/File Photo

By Silvio Cascione

BRASILIA (Reuters) – Brazil’s annual inflation rate in April likely eased to its lowest level in nearly 10 years, which could help prod the central bank to make another steep interest rate cut this month, a Reuters poll showed on Monday.

The IPCA benchmark consumer price index was seen rising 4.10 percent in the 12 months through the end of April compared with a 4.41 percent increase in the year to the middle of the month, according to the median estimate of 26 economists surveyed. The data is due to be released on Wednesday.

Brazilian annual inflation has tumbled from a 12-year peak of 10.7 percent in January 2016 amid slack consumer demand stemming from a severe recession and the highest unemployment on record.

President Michel Temer has hailed the drop in inflation as evidence that his austerity agenda was putting Latin America’s largest economy on a solid footing for recovery.

As inflationary pressures have eased, the central bank has steadily cut its benchmark interest rate from 14.25 percent in October.

Last month, it slashed it by 100 basis points, taking it to 11.25 percent. It was the deepest cut to the rate in nearly eight years.

“The (inflation) numbers should strengthen the case for another 100 basis point cut this month,” said Leonardo Costa, an economist with the São Paulo-based consultancy Rosenberg & Associados.

On Monday, a central bank survey of economists forecast a central bank interest rate of 8.5 percent and 4 percent annual inflation by December.

In the month of April, consumer prices were expected to have increased 0.16 percent from March, slowing from a 0.25 percent rise in the previous month, according to the median of 28 forecasts in the Reuters poll.

Forecasts for the monthly inflation rate ranged between 0.12 percent and 0.27 percent, while estimates for the 12-month rate varied between 4.07 percent and 4.22 percent.

Housing and transportation prices probably fell in April, while education costs slowed their increase, according to economists in the Reuters poll.

A one-off cut in electricity rates also likely contributed to last month’s anticipated inflation slowdown, as the government reversed a tariff surcharge related to the Angra 3 nuclear power plant, economists said. The central bank, however, said last month that this drop, however sizable, should not have relevant implications for monetary policy.

(Reporting by Silvio Cascione Editing by W Simon)

Brazil protesters, police clash in first general strike in decades

Riot police officers are seen as a bus burns during clashes between demonstrators and riot police in a protest against President Michel Temer's proposed reform of Brazil's social security system, in Rio de Janeiro, Brazil, April 28, 2017. REUTERS/Ricardo Moraes

By Brad Brooks and Anthony Boadle

SAO PAULO/BRASILIA (Reuters) – Brazilian protesters torched buses, clashed with police in several cities and marched on President Michel Temer’s Sao Paulo residence on Friday amid the nation’s first general strike in more than two decades.

Unions called the strike to voice anger over Temer’s efforts to push austerity measures through congress, bills that would weaken labor laws and trim a generous pension system.

The blackened hulls of at least eight burned commuter buses littered central Rio de Janeiro as police launched rounds of tear gas and rubber bullets at masked protesters.

Despite the protests, Temer and members of his center-right government denounced the strike as a failure. They said that the unions’ targeting of public transport meant that people who wanted to go to work were unable to.

Unions said the strike was a success and pointed to adherence by millions of workers in key sectors like automakers, petroleum, schools and even banking. Strikes hit all 26 states and the Federal District.

“It is important for us to send a message to the government that the country is watching what they are doing, taking away workers’ rights,” said Marco Clemente, head of the 4,000-member radio and TV workers union in Brasilia, leading a picket line outside the headquarters of state broadcaster EBC.

Temer, who was in Brasilia, denounced the violence used by some protesters. He said in an emailed statement that “small groups” had blocked the population from using public transport and said that “work toward the modernization of national legislation will continue.”

Brazil’s last general strike took place in 1996, in protests over privatizations and labor reforms under former President Fernando Henrique Cardoso.

Despite Friday’s action, many analysts said the strike would have little immediate impact on the president’s austerity push, and that the bills are still expected to pass given Temer’s continued support among lawmakers.

BRAZILIANS ANGRY AT REFORMS

Temer’s reforms have deeply angered many Brazilians and he is weighed down by a 10 percent approval rating for his government.

He took over last year when former leader Dilma Rousseff, whom Temer served as vice president, was impeached for breaking budgetary rules. Her supporters denounced the act as a ‘coup’ orchestrated by Temer and his allies in a bid to derail a sweeping corruption investigation.

“This is not a government that was elected with these proposals,” said Bernard Costa, a 27-year-old medical student protesting in Sao Paulo. “These reforms are showing people that this government has is neither legitimate nor representative.”

“Shameless government” read one placard waved by one of a group of protesters who gathered outside Temer’s family home in Sao Paulo. Police used tear gas to disperse the crowd.

Nearly one-third of Temer’s ministers and several congressional leaders are under investigation in Brazil’s largest political graft scheme yet uncovered. It revolves around kickbacks from construction companies in return for winning lucrative projects at state-run oil company Petrobras <PETR4.SA>.

Temer has proposed a minimum age for retirement, which would compel many employees to work longer to receive a pension and reduce payouts in a country were many workers retire with full benefits in their 50s.

The lower house of Congress approved a bill this week to weaken labor laws by relaxing restrictions on outsourcing and temporary contracts, further inflaming union resistance.

The government argues that economic reforms are needed to pull Brazil out of its worst recession on record, cut a huge budget deficit, reduce record unemployment and modernize the economy.

The strike had a large impact on auto production in Sao Paulo, which concentrates the bulk of the industry in Brazil.

General Motors Co <GM.N>, Ford Motor Co <F.N>, Toyota Motor Corp <7203.T> and Mercedes-Benz parent Daimler AG <DAIGn.DE> all halted production, according to company officials, unions and market analysts. Fiat Chrysler Automobiles NV <FCHA.MI>, the No. 1 car seller Brazil, said it was operating normally.

Union officials said most workers at state-run oil producer Petroleo Brasileiro SA <PETR4.SA>, known as Petrobras, joined the strike, but the company said the stoppage had no significant impact on output. Iron ore miner Vale SA <VALE5.SA> said the strike did not affect its operations.

The 24-hour strike started after midnight on Friday, ahead of a long weekend with Labor Day on Monday.

The benchmark Bovespa stock index <.BVSP> was up nearly 1 percent while the nation’s currency, the real <BRBY> <BRL=>, was little changed as investors assessed the impact of the strike.

(Reporting by Brad Brooks in Sao Paulo and Anthony Boadle in Brasilia; Additional reporting by Pedro Fonseca in Rio de Janiero and Brad Haynes, Alberto Alerigi, Roberto Samora and Guillermo Parra-Bernal in Sao Paulo; Editing by Daniel Flynn, W Simon, Leslie Adler and Lisa Shumaker)

Brazil cities paralyzed by nationwide strike against austerity

A demonstrators holds a placard in front of a burning barricade during a protest against President Michel Temer's proposal to reform Brazil's social security system in the early hours of general strike in Brasilia, Brazil, April 28, 2017. REUTERS/Ueslei Marcelino

By Brad Brooks and Pedro Fonseca

SAO PAULO/RIO DE JANEIRO (Reuters) – Nationwide strikes led by Brazilian unions to protest President Michel Temer’s austerity measures crippled public transport in several major cities early on Friday across this continent-sized nation, while factories, businesses and schools closed.

In the economic hub of Sao Paulo, the main tourist draw Rio de Janeiro and several other metropolitan areas, protesters used barricades of burning tires and other materials to block highways and access to major airports.

Police clashed with demonstrators in several cities, blocking protesters from entering airports and firing tear gas in efforts to free roadways.

Many workers were expected to heed the call to strike for 24 hours starting just after midnight Friday, due in part to anger about progression this week of congressional bills to weaken labor regulations and efforts to change social security that would force many Brazilians to work years longer before drawing a pension. In addition, the strike will extend a holiday weekend ahead of Labor Day on Monday.

This will be Brazil’s first general strike in more than two decades if it gets widespread participation.

Authorities boarded up windows of government buildings in national capital Brasilia on Thursday, fearing violent clashes between demonstrators and police.

Demonstrations are expected in other major cities across the Latin American nation of more than 200 million people.

“It is going to be the biggest strike in the history of Brazil,” said Paulo Pereira da Silva, the president of trade union group Forca Sindical.

Violent protests have occurred repeatedly during the past four years amid political turmoil, Brazil’s worst recession on record, and corruption investigations that revealed stunning levels of graft among politicians.

Nearly a third of Temer’s cabinet and key congressional allies came under investigation in the scandal this month, and approval ratings for the president, who replaced Dilma Rousseff last year after her impeachment, have fallen even further.

Rousseff’s Workers Party grew out of the labor movement, and her allies have called her removal for breaking budget rules an illegitimate coup.

“Temer does not even want to negotiate,” said Vagner Freitas, national president of the Central Workers Union (CUT), Brazil’s biggest labor confederation, said in a statement. “He just wants to meet the demands of the businessmen who financed the coup precisely to end social security and legalize the exploitation of workers.”

Marcio de Freitas, a spokesman for Temer, rejected the union’s criticism, saying the government was working to undo the economic damage wrought under the Workers Party government, which had the backing of the CUT.

“The inheritance of that was 13 million unemployed,” he said. “The government is carrying out reforms to change this situation, to create jobs and economic growth.”

(Reporting by Brad Brooks in Sao Paulo and Pedro Fonseca in Rio de Janiero; Additional reporting by Anthony Boadle in Brasilia; Editing by Daniel Flynn and Lisa Von Ahn)

Brazil indigenous protest over land rights turns violent

Brazilian Indians take part in a demonstration against the violation of indigenous people's rights, in Brasilia, Brazil April 25, 2017. REUTERS/Ueslei Marcelino

BRASILIA (Reuters) – Indigenous people and police clashed in Brazil’s capital city on Tuesday, as officers fired rubber bullets and tear gas while tribe members shot arrows in return during a protest against farmers’ encroachment on reservations.

The demonstration was peaceful until police blocked some of the indigenous people, their bodies painted and wearing colorful headdresses, from climbing a ramp that led into the congressional building, according to a Reuters photographer on the scene.

The clashes ended around dusk. Some indigenous people suffered light injuries. There was no immediate word whether any officers were hurt.

Dozens of indigenous people are killed each year in Brazil in fights with farmers and ranchers over land, often in the relatively lawless Amazon region, where hired gunmen have been used to push the indigenous off resource-rich reserves.

Sonia Guajajara, a coordinator for the march, said some 4,000 indigenous people and supporters took part in the protest.

It focused on legislation that would give the last word on deciding land boundaries for indigenous reservations to Congress, where a powerful farm lobby holds sway. Currently, Brazil’s president retains the power to set such boundaries.

“We carried 200 coffins symbolizing the genocide and deaths of indigenous peoples at the hands of the authorities allied to agribusiness,” Guajajara said.

She said the violent police response was nothing compared to that suffered by indigenous people in territories where deadly clashes continue over disputed land.

A police spokesman said the marchers went beyond the agreed point and invaded congressional grounds, requiring the use of force to keep them from entering the building. He said an arrow struck a police bag but no officers were hurt.

(Reporting by Ueslei Marcelino and Anthony Boadle; Editing by Jonathan Oatis)

Brazil waters down pension reform as protests turn violent

Police officers attempt to break into the Brazilian National Congress during a protest by Police officers from several Brazilian states against pension reforms proposed by Brazil's president Michel Temer, in Brasilia, Brazil April 18, 2017. REUTERS/Adriano Machado

By Maria Carolina Marcello and Ueslei Marcelino

BRASILIA (Reuters) – Brazilian President Michel Temer on Tuesday made new concessions to ease passage of an unpopular pension reform bill, leading police unions to try and invade Congress in the latest angry demonstration from a labor group.

The watered-down proposal, which has faced pressure from skittish lawmakers, has raised doubts among investors about how close it will come to the original goal of narrowing a huge and growing budget deficit.

After the details of the new proposal were revealed on Tuesday, protesting police unions clashed with congressional guards in riot gear, who used tear gas and stun grenades to disperse the demonstrators from the front doors of Congress.

The protest underscored the unpopularity of a reform that is at the heart of Temer’s austerity program, which aims to rescue the Brazilian economy from its deepest recession on record.

Temer agreed to set a lower retirement age for women, police, teachers and rural workers and grant more generous transition rules for workers after allies’ concerns delayed the bill’s formal presentation in Congress until Wednesday.

Finance Minister Henrique Meirelles told Reuters in an interview that the changes will reduce government savings from the reform by 20 percent to 25 percent in the next 10 years, and by nearly 30 percent over a 30-year horizon.

Meirelles said changes to the original bill were within the government’s expectations, and he did not expect further modifications as the proposal makes its way through Congress.

Some analysts have a dimmer outlook. In a note to clients, JP Morgan analysts said the changes could mean savings of just 472 billion reais, down 40 percent from 781 billion originally.

Pension reform is a contentious issue in Brazil, which has one of the world’s most generous social security systems and an average retirement age of 54.

Investor concerns over potential delays to the reform have weighed on demand for Brazilian assets in recent days.

The country’s benchmark Bovespa stock index <.BVSP> slipped 0.3 percent on Tuesday, falling for the fourth time in five sessions, and the real reversed early gains.

Adding to setbacks for the government on Tuesday, the lower house voted down an effort to fast-track another reform proposed by Temer to modernize labor laws, making work contracts more flexible to improve Brazil’s business environment.

House Speaker Rodrigo Maia said the setback was the result of a parliamentary error, leaving open the possibility of another vote.

(Reporting by Maria Carolina Marcello and Ueslei Marcelino; Writing and additional reporting by Alonso Soto; Editing by Brad Haynes and Leslie Adler)