Gasoline dispute leaves consequences on government dynamics – 02/03/2023 – Bruno Boghossian

The arm wrestling on fuel taxation left some sequels in the dynamics of Lula’s government. The dispute forced the Minister of Finance and the President of the PT to recognize themselves as public opponents and meant that the struggle for influence over economic policy was no longer fought only in the corridors of the Planalto Palace.

Both sides worked to make the disagreement visible. Gleisi Hoffmann had Fernando Haddad in his sights when he stated that the proposal to return to collecting taxes was “failure to fulfill campaign commitments”. Haddad, in turn, wanted to make it clear that Lula’s final decision was a defeat for Gleisi, although she had “strong opinions”.

Even if the president values ​​disagreements on the team, creating for himself the opportunity to exercise the power of arbiter, these clashes can reach levels beyond a healthy plurality. Allies of Haddad and Gleisi have already taken the diagnosis to Lula, with the warning that the war should continue in the coming months.

It wasn’t gasoline, in particular, that divided the two camps. Gleisi and a wing of the PT oppose an effort to adjust public accounts in the first year of his term —a flag raised by the minister in the name of economic stability. For these PT members, the government should do everything to stimulate growth and job creation, even if it means increasing expenses.

Haddad insists on a prescription for cost containment with the aim of preventing inflation from remaining under pressure and leading to an increase in interest rates that further impede growth. In moments of tension, the minister went so far as to confide that he considers the opposition of PT members to be sabotage of his plans and even his permanence in office.

The clash creates risks for the government in Congress if the PT does not fully support Haddad’s agenda in voting on measures that involve some control of expenses. The minister, ultimately, may be forced to resort to the center to protect himself from friendly fire.

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