Haddad says Central Bank note could have been “more generous”

The Minister of Finance, Fernando Haddad, criticized the analysis made by the Central Bank to maintain the basic interest rate (Selic) at 13.75% per year and without room for a reduction in the short term. In an interview after a meeting with parliamentarians this Monday afternoon (6), the minister said that the government inherited the public accounts in a complicated situation and that it has already announced a package to reduce the fiscal deficit.

“We are not going to, in 30 days of government, resolve a liability of R$ 300 billion inherited from the previous government, but our commitment is to balance the accounts. And I announced, on January 12th, what we are going to pursue for better results. In this regard, I think the Copom note [Comitê de Política Monetária] could be more generous with the measures we have already taken,” he said.

The fiscal package announced by the minister intends to reduce the primary deficit by more than R$ 200 billion for this year, with a focus on increasing tax collection and changes in the policies for judging tax debts. The financial market, however, saw the measure as “palliative” and criticized some of the actions taken by the Treasury.

This Tuesday morning (7th), the Copom published the full minutes of the last meeting, and stated that it decided to maintain the basic interest rate at the current level due to the “uncertainty surrounding its scenarios and a balance of risks with variance still higher than usual for prospective inflation”. This, he says, “is compatible with the strategy of convergence of inflation towards the target over the relevant horizon, which includes the years 2023 and, to a greater extent, 2024”. (see in full)

In a specific section of the Copom minutes that mentions “fiscal uncertainties” about the progress of economic policies, Haddad said he believed that the Central Bank took into account the measures taken by the previous government – ​​some of which needed to be reviewed at the beginning of this year.

“On the first day of the government, we took measures revoking the irresponsibility of the last ten days of the previous government, which took five measures, exempting a series of sectors and harming the collection of the first year of the Lula government. There is a fiscal situation that inspires care, but this is an inheritance that we have to manage, ”he said.

He pointed out that the Ministry of Finance and the Copom need to “work together towards the same goal”, in which fiscal and monetary policies go hand in hand in defining the direction of the economy. The speech was preceded by new criticisms made by President Luiz Inácio Lula da Silva (PT) to the maintenance of the basic interest rate at 13.75%, made earlier during the inauguration of Aloizio Mercadante as president of the National Bank for Economic and Social Development (BNDES).

“Just look at the letter [ata] of the Copom for us to know that this increase in interest rates and the explanation they gave to Brazilian society is a shame”, he fired.

Since the beginning of the new government, Lula has been criticizing the independence of the Central Bank and the basic interest rate. Last week, in an interview with Rede TV, he questioned the practical result of the measure and said he would evaluate “what the independent Central Bank meant”.

BC will have two new directors appointed by the president

Also during the interview, Fernando Haddad said that two directorates of the Central Bank will remain vacant this year, and that he is already receiving suggestions from the president of the monetary authority, Roberto Campos Neto, to take to Lula. According to the minister, the indications will be “technical names that are able to fulfill the duties and competences of the position that will be occupied in the most appropriate way”.

The vacancies will be left by the directors of Monetary Policy, Bruno Serra, and of Inspection, Paulo Souza.

Provisional measure to restore the casting vote in Carf

Also on Monday (7), Haddad met with the Minister of Institutional Relations, Alexandre Padilha, and leaders of parties from the allied base to discuss the provisional measure that restores the casting vote in the judgments of the Administrative Council of Tax Appeals (Carf) that draw, according to Agência Brasil.

According to the minister, the measure criticized by the financial and business market will affect “100, 200 taxpayers. We are not talking about Brazilian taxpayers. We are talking about very specific and controversial cases that end up causing damage to the treasury. I have always made it clear, even to these taxpayers, who are large companies, that our goal is tax justice,” he said.

Haddad said he is working to prevent “any kind of abuse” by tax auditors. “A pacified understanding between the auditors will have to be considered valid by each and every auditor so that there is no incidence of infraction notices that are not proper”, he completed.

Calculations by the Ministry of Finance indicate that the return of the casting vote and other measures for Carf will yield around R$ 50 billion to public coffers this year, in addition to a permanent annual inflow of R$ 15 billion.