Leave the Central Bank alone – 07/02/2023 – Elio Gaspari

After four years of Bolsonaro with his playpen madness, it was possible to expect a relaxation in national political life. Lula promised peace, stability and predictability. In little more than a month of government, in his relationship with the independent Central Bank, with the inevitable ricochet in the economy, he delivered belligerence and turmoil.

Lula’s annoyance has two aspects. In one, he and his finance minister think that the Selic rate of 13.75% a year is exaggerated. In another, he believes that the autonomy of the Central Bank is “nonsense”. Regarding the fee, the discussion is open. As for the “nonsense” there is nothing to discuss, the Bank’s autonomy derives from an act of Congress.

In one of his moments of criticism, Lula made a comparison:

“I doubt that this president of the Central Bank (Roberto Campos Neto) is more independent than he was [Henrique] Meirelles.”

True, but the difference is not in the figure of Campos Neto, it is in Lula. From the beginning of 2003 to the end of 2010, Henrique Meirelles presided over the Central Bank and then President Lula left him alone. He never referred to him as “this president” or “this citizen”.

Time passed and Lula entered his third term without even one formal meeting with Campos Neto. Worse: during the transition, while his team was negotiating a Constitutional Amendment to ease his first year in office, the president of the Central Bank did not even know who to call.

In his last attack, Lula said that “there is no justification for the interest rate to be at 13.50% [ela está em 13,75%]. Just look at the letter from the Copom for us to know that this interest rate increase is a disgrace”.

Today’s Copom, like that of Meirelles’ time, sets the interest rate to hold down inflation, which is indeed a shame. Lula said that there was an increase in interest rates, which did not happen. She stayed where she was. The increase in the Selic rate took place in January 2003, in the first month of Lula’s term, when the Copom raised it from 25% to 25.5%.

At the time, he did not complain, as he had an eye on the credibility of his government. He got it. (Vice-president José Alencar would later criticize high interest rates, without calling anyone “this citizen”.)

Twenty years later, Lula may even be someone else, but by choosing the Central Bank to play the villain and his president to play the goat, he differs from what he was and resembles his predecessor. Walled by the Covid pandemic, he turned Health Minister Luiz Henrique Mandetta into a goat, fired him, and went nowhere.

There is a strong whiff of palace intrigue in what appears to be Lula’s ill will towards Roberto Campos Neto. The president of the Central Bank went to some events where he shouldn’t have appeared, but calling him a Bolsonarist is vulgar patrol.

In a government that had Minister Paulo Guedes as a seller of dreams, Campos Neto had an institutional behavior. In a sign of new (and old) times, in addition to criticism from Lula and some of his ministers, he is poisoned in the blogosphere, a weapon brought into everyday politics by Captain Bolsonaro.

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