July 1, 2006

Lula raises civil servant pay

SAO PAULO, Brazil (Reuters) - Brazilian President Luiz
Inacio Lula da Silva has signed decrees raising pay for more
than 1.5 million active and retired civil servants, though the
head of the country's electoral court had tried to block wage
increases in the run-up to October elections.

Lula, who polls show is favored to win a second-term,
raised pay scales late Friday for nearly all public workers
between 5 percent and 190 percent. Spending will rise by about
5.5 billion reais ($2.5 billion) this year and nearly 11
billion reais a year starting in 2007, the government's Agencia
Brasil news agency said.

Lula signed the decrees, which will need congressional
approval, after the attorney general said the raises would be
valid. The attorney general disagreed with Marco Aurelio de
Mello, president of Brazil's top electoral court, who had said
large pay raises cannot be granted to public workers within six
months of elections.

($1 = 2.17 reais)