Gleisi and Haddad unite in criticizing the Central Bank and Centrão

Amid disagreements with the president of the PT, Gleisi Hoffmann, over her conduct of economic policy, the Minister of Finance, Fernando Haddad (PT), ended up echoing her criticisms of the actions of the Central Bank (BC) this Saturday (9 ). During the party’s electoral conference for 2024, held in Brasília and starting on Friday (8), Haddad characterized the current board of directors of the Central Bank as “tough” and not very “airy”.

“The BC board only started reducing the interest rate in August”, he protested. On Tuesday (5), Haddad had already ordered the monetary authority to “fulfill its role”, when commenting on the result of the Gross Domestic Product (GDP) for the third quarter, which indicated an increase of just 0.1%.

The PT National Directory approved on Friday night, during its conference, a political resolution that defends the need for Brazil to “urgently free itself from the dictatorship of the independent Central Bank” and “fiscal austericide”. The text justifies that monetary tightening to combat inflation, together with public spending controls, need to be reviewed to boost the growth of the country’s economy.

Fernando Haddad indirectly endorsed Gleisi’s criticisms of political agreements with Centrão, the majority bloc in the Chamber, to approve projects of interest to the government. “We don’t have a progressive base in Congress. I’m not saying anything bad or good, I’m stating a fact”, he said this Saturday (9), during the conference.

The PT’s political document states that Centrão is formed by “conservative and physiological” forces, strengthened by the imposing budget. According to the text, the practice conspires against the presidential regime and gives the bloc “immoderate influence” over the Executive. The party states that its minority “political field” needs to change, and that it is “urgent” to change the correlation of forces from the next general elections onwards. Gleisi said that a sharper drop in Lula’s popularity would cause the government to “be swallowed” by Congress led by Centrão.

For Fernando Haddad, the current composition of the Legislature results in resistance to approving proposals to increase tax revenue to offset the growing deficits in public accounts. At this point, he defended vetoes by President Luiz Inácio Lula da Silva (PT) on “jabutis” — excerpts added to the projects by parliamentarians that have no relation to the initial objective.

Haddad’s speech comes at a time when the government is racing against time to approve economic measures that aim to increase revenue and directly interfere with the 2024 Union Budget. Congressmen go into recess on December 23, the deadline for the approval of matters of interest to the government. One of the few projects that advanced recently was the one dealing with the taxation of funds abroad and exclusive investment funds. Even with the changes it has undergone, the proposal should generate extra revenue of R$20 billion for the government, according to its estimates.

Zero deficit puts Haddad and Gleisi on opposite sides in the PT

PT members led by deputy Lindbergh Farias (PT-RJ) and Gleisi had been pushing in recent weeks for the government to change its target of zero fiscal deficit to a deficit of at least 0.5% of GDP in the Fiscal Guidelines Law (LDO ), but Haddad resisted and convinced Lula to maintain the objective of balancing the accounts.

In a debate during the conference, the PT president criticized Haddad’s insistence on a zero deficit. “For me, it would be a deficit of 1%, 2%. We cannot let the economy slow down. We cannot have contingencies in the Budget, neither in investment nor in social programs. This will enable us to get the economy back on track.”

In response, Minister Haddad disagreed with the statement that “a deficit makes the economy grow”, citing recent losses that did not necessarily result in a warming of the economy.

Asked during the PT conference about the differences with the minister, the PT president said they were natural. “He (Haddad) has his vision and we have a somewhat divergent vision, which was presented in a very calm and respectful way,” she said.