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LatinNews Daily - 13 May 2021

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In brief: Peru gov't to challenge ‘unaffordable’ bills passed by congress

* Peru’s economy & finance minister, Waldo Mendoza, has announced that the government will appeal at the constitutional court (TC) two bills approved by congress which it considers to be illegal, saying that these would create “unpayable costs” for the government. The first of these bills refers to the national housing fund (Fonavi). After it emerged that Fonavi funds were being used to finance projects other than social housing, on 23 April congress approved a bill calling on the government to repay contributors with interest. Whilst the bill’s first draft initially ordered the government to repay only workers, this was expanded to order repayments to employers and government entities. Mendoza said that “the amount the state would have to repay is nearly 50 times greater than China’s GDP, it’s an unpayable sum… governments that come after us won’t be able to operate, won’t be able to pay it even in 500 years”, arguing that the bill is unconstitutional given that congress does not have the authority to order spending. The other bill that the government plans to challenge at the TC refers to collective labour negotiation rights in the public sector, which the ministry of finance claims will cost the government between PEN$2.36bn (US$634.6m) and PEN$6.22bn per year.