Fiscal rule fuels distrust in the Lula government – 03/17/2023 – Market

The debate on the new rule for controlling public accounts, led so far by Minister Fernando Haddad (Finance), takes place amidst a climate of distrust in the core of the government.

According to allies, Haddad restricted the discussion to a small group to prevent the proposal from leaking and arriving transfigured at the hands of President Luiz Inácio Lula da Silva (PT). The design was only detailed to the agent this Friday (17).

Afraid of possible criticism from PT members, the head of the economic area sought first and foremost to win the boss’s endorsement, thus avoiding requests for changes – keeping the design as far away as possible from the eyes of the political wing.

The idea was to prevent the proposal from being the subject of public dissection before it was officially presented to the president.

According to reports made to the Sheet, members of other areas of the government would have liked to have seen the proposal beforehand in order to guide work on the subject. But the interested folders had not, until the last few days, received even the general rules of Haddad’s proposal.

Until this Friday, the so-called fiscal framework had not been forwarded, for example, to the Civil House – despite the demand for information.

Within the Ministry of Finance itself, the debate was limited to the secretaries closest to the issue, while the others were not informed of details – which is also interpreted as a lack of confidence in the vision of the other members of the portfolio.

During preparation, Haddad presented the guidelines to Vice President and Minister Geraldo Alckmin (Development, Industry, Commerce and Services) and Minister Simone Tebet (Planning), in addition to the President of the Central Bank, Roberto Campos Neto.

According to members of the government, the Minister of Finance also spoke with economists of different stripes. Allies even reacted strangely to the fact that he prioritized a conversation with the president of the Central Bank – with a liberal view and who has been publicly criticized by Lula.

Haddad’s strategy generated discomfort among his peers, who see in him an intention to consolidate himself as a superminister.

The attitude was received by Esplanada colleagues as a sign that, in Haddad’s opinion, other members of the government would not be qualified enough for a debate on the new fiscal rule.

In defense of the rite defined by Haddad, his interlocutors attribute this caution to the impact that the theme has on the market and its repercussions on the country’s economy. They say, for example, that he even canceled a meeting at the Civil House after information was leaked.

Another concern of Haddad resides, according to allies, in the articulation of the proposal in the National Congress. His intention would be to convince Lula of the need to present a text with a chance of approval. Therefore, this debate could not be public.

The minister himself has held meetings with the aim of oiling the procedure in Congress. He even had dinner with the mayor, Arthur Lira (PP-AL), to make him aware of the importance of the project.

This articulation is an attribution of the Secretariat for Institutional Relations, now headed by Minister Alexandre Padilha, who did not participate in the meeting on Friday.

In addition, Lula’s public guidance to ministers this week counts in Haddad’s favor in the discussion. The agent determined that the proposals must be aligned internally before being released.

With this stance, Haddad tries to prevent allies from publicly criticizing the framework, as happened with the idea of ​​recharging fuel. PT president, Gleisi Hoffmann (PR) said that this would be an electoral fraud.

In the opinion of Haddad’s allies, Gleisi will not have the same attitude towards a proposal endorsed by Lula.

Legally, the government has until the end of August to send the new tax rule to Congress. But the minister promised to present it later this month, given the expectations generated in the financial market.

By directly interfering in projections for the public accounts over the next few years, the topic is closely followed by economists and investors.