UPDATE 1-Brazil economy minister Guedes agrees with Supreme Court debt proposal
Business proposal

UPDATE 1-Brazil economy minister Guedes agrees with Supreme Court debt proposal

(Adds details of court-awarded debt payments, comments by Guedes on letter by business leaders)

SAO PAULO, Aug 30 (Reuters) – Brazil Economy Minister Paulo Guedes said on Monday he agrees with the solution proposed by the president of the Supreme Court, Luiz Fux, for payment of court-awarded debt owed by the government.

The Supreme Court proposed last week that instead of paying the debt in installments, the government make sure the volume of payments does not exceed the budget spending ceiling. The proposal would reduce by around 50 billion reais ($9.6 billion) the total amount the government would have to pay next year.

Instead of 89 billion reais, the government would have to pay around 40 billion reais in court awarded debt next year.

Guedes said he supports the Supreme Court proposal, after meeting with Senate President Rodrigo Pacheco. Speaking to journalists after the meeting, Pacheco said he will meet with Fux on Tuesday to discuss the proposal. House speaker Arthur Lira will also be at the meeting, he said.

Previously, the ministry had proposed the payment of all debt in installments.

Guedes also commented to reporters on an open letter that Brazilian business leaders had been contemplating publishing that would criticize the government. Lobbying groups representing manufacturers and banks were expected to sign the letter.

Guedes said he knew the letter was going to “attack the government” and that disagreements among the business leaders caused publication to be postponed.

It was not immediately clear how Guedes knew of the letter’s contents.

The letter was originally expected to be published on Tuesday and may now be published next week, House speaker Lira said. ($1 = 5.1936 reais) (Reporting by Isabel Versiani in Brasilia and Tatiana Bautzer in Sao Paulo Editing by Matthew Lewis)