Government considers names of former directors of the Dilma administration for vacancy in BC – 02/25/2023 – Market

The government of Luiz Inácio Lula da Silva (PT) is considering the names of Luiz Awazu Pereira da Silva and Tony Volpon, former directors of the Central Bank under Dilma Rousseff (PT), for the institution’s Monetary Policy board. The mandate of the current holder, Bruno Serra Fernandes, expires next Tuesday (28).

The choice of the future director is up to the Chief Executive, who has clashed with BC President Roberto Campos Neto in recent weeks. Lula’s allies defend a name that is “balanced”.

Although the end of Serra’s term is near, members of the government believe that the decision on who will be the new member of the institution’s summit may be postponed. This is because the Minister of Finance, Fernando Haddad (PT), will have as a priority to resolve the impasse over the possibility of returning to charging federal taxes on fuels, such as gasoline and diesel.

Ministers and allies at the Planalto Palace assess that this should be the focus of Haddad and Lula for the next few days and that the decision regarding the Central Bank should only be taken later.

In addition to Serra’s case, the mandate of the Inspection director, Paulo Souza, also ends next Tuesday. It is likely that he will be reappointed. In an interview with the program Roda Viva, on TV Cultura, Campos Neto stated that the director intends to remain for another four years.

“He [Paulo Souza] wanted to leave for health reasons, he got better and told me he doesn’t want to leave anymore. It’s a great case of reappointment, but again, it’s the government’s prerogative,” she said.

BC members demand that the Inspection director be a career name in the body, and the most quoted is the current holder of the position.

“We have a part of the directors who are much more technical and linked to areas that need to have a greater continuity of management. I hope that all this is taken into account”, highlighted Campos Neto in December 2022.

Even if they are not reappointed, directors may wait in office for the appointment of new members. Serra signaled in early February that he will remain in the post until his replacement is appointed by the government.

The law on the autonomy of the monetary authority, approved in 2021, determined that it is up to the President of the Republic to indicate the names of directors.

Subsequently, they undergo a sabbatical at the Federal Senate. The formalization of who will assume the presidency of the CAE (Economic Affairs Commission) also weighs on the next steps of the discussion.

The initial idea of ​​the Lula government was to discuss the choice with Campos Neto, who, in turn, expected to make a decision in consensus with the Lula administration.

The BC president even started conversations with economists from the private sector in search of a new name for the Monetary Policy board. As shown to Sheet, one of those surveyed was economist Sandro Mazerino Sobral, market leader at Santander Brasil. According to Campos Neto, the function requires a great deal of interaction with the financial market as it deals with foreign exchange and auctions.

“It needs to be a person who has technical operating table experience. The only thing I said is that it’s important to have a person who has that experience. If I need suggestions, I’ll send them. If you want to sit down and talk about suggestions that I’ve already exist, I am also open”, said the head of the municipality also in Roda Viva.

After going to the field to look for names, Campos Neto withdrew in the wake of public disagreements with Lula. Members of the government even said that the president of BC would have lost the ability to influence the new names in the midst of the attacks.

Campos Neto, however, made signs of reconciliation that worked, according to Haddad’s allies. For this reason, he must be heard when choosing new directors. Even so, names linked to the market face more resistance from PT members.

Over the past month, the President of the Republic has made statements critical of the posture of Campos Neto, appointed by Jair Bolsonaro (PL) to head the institution. The tension in the relationship occurred after the Central Bank maintained the basic interest rate at a high level for the fourth time in a row and signaled that it could postpone the start of Selic cuts.

At the time, members of the government considered that Campos Neto was inept with Copom’s decisions. For Lula’s allies, the BC president confused the monetary authority’s autonomy with isolation.

Faced with the negative impact that the raid was generating on the financial market, allies of Lula and Campos Neto acted to pacify the scenario.

The main gesture came from the BC president. In an interview with Roda Viva, he stated that he would do everything possible to bring the monetary authority closer to the PT administration. Days later, Campos Neto also said that it is necessary to have a “more special eye on social issues”.

The gestures served to improve the atmosphere with Haddad and the Minister of Planning, Simone Tebet. On the last day of the 16th, the three had a reserved lunch of about two hours, considered good by interlocutors. The head of the Treasury stated that the theme of the meeting, which took place before the meeting of the CMN (National Monetary Council), was the alignment of fiscal and monetary policies.