Like Haddad, Palocci was also the target of friendly fire from the PT – 03/04/2023 – Market

“The first meeting of the National Executive of the PT since the inauguration of President Luiz Inácio Lula da Silva was marked by criticism of the first actions of the current government”, thus began the report that made the headline of Sheet on January 21, 2003.

The conflict involved the then responsible for the Treasury, Antonio Palocci, and a left wing of the party. Twenty years later, a similar clash took place between the current president of the acronym, Gleisi Hoffmann, and the minister of the portfolio, Fernando Haddad, over the return of the collection of federal taxes on fuel.

In the recent tussle, the party president’s side argues that the government cannot solve at once the problem created by Jair Bolsonaro (PL) last year, by exempting fuel on the eve of the election.

Defending the recovery of public accounts, Haddad, in turn, ended up announcing a return, albeit diluted, of collection.

Questioned about the clash, the minister downplayed the crisis in an interview with UOL. “The important thing is that she [Gleisi] defended President Lula’s decision. (…) He is a person who has strong opinions, but who knows that the final decision, who arbitrates the conflicts of positions within the government and outside the government, is President Lula.”

The dilemma between making adjustments to public accounts or increasing expenses in an attempt to generate jobs and revive the economy also divided a wing of the PT and the Treasury in Lula’s first term, two decades ago.

As Haddad himself recently recalled, Palocci was even the target of a petition, led by members of the party. At the beginning of the PT’s first government, friendly fire came from the so-called “radical wing of the PT”, which criticized the way in which the then minister conducted economic policy. The group also opposed pension reform.

Still in January of that year, there was an increase in the basic interest rate, from 25% to 25.5% per year, signaling the maintenance of the previous policy, which irritated the most left-wing PT members.

Conflicts between the party and the government were headed by parliamentarians such as former senator Heloísa Helena (AL) and federal deputies João Batista Abreu, o Babá (PA), and Luciana Genro (RS) —a group that did not have the support of the leadership petista and, later, would found the PSOL.

At the time, the then mayor of São Paulo, Marta Suplicy, said that the ideas of the PT left would put the country in the ICU. “We have no other line. That’s what the minister has been saying to his different interlocutors who oppose this policy. What is the alternative?”, questioned Marta, who defended that the medicine prescribed by Palocci, despite being bitter, contradicted expectations. of credit leakage and increased risk in Brazil.

“The mayor, in addition to reproducing allegedly scientific arguments, only shows that the places she frequents prevent her from seeing that Brazil is already in the ICU”, countered Senator Heloísa Helena at the time.

The nanny went so far as to say that she did not trust Palocci “not even as a doctor [formação profissional do ministro]”.

The then president of the party, José Genoino, wrote a text in which he criticized the position of the most left wing. After being called a neoliberal in a closed meeting with the bench, Palocci said he was willing to debate calmly with the radical wing, but that he would defend the government’s agenda.

In mid-February, President Lula said at a meeting with ministers that he was increasingly satisfied with Palocci’s performance. The purpose of the affection was to reinforce to the market that the party would not make an abrupt rupture in the economy.

“I’ll be quite honest: I don’t count on the party commanders to frame the PT radicals. I count on the PT radicals to understand the moment that Brazil is going through”, said Palocci, in an attempt to smooth over the rough edges with the critics. petistas.

In a scenario of the US war against Iraq, with record unemployment, rising public debt and high inflation, the impatience of the PT’s left-wing congressmen and councilors with Palocci only grew.

Economist Maria da Conceição Tavares —whose recordings of interviews and lectures have been retrieved over the internet in recent years— denounced at the time what she called Palocci’s continuism or “malanism”, in reference to his predecessor at the farm, Pedro Malan.

At the end of the first half of that year, the discussion was whether it was time to try a Plan B for the economy and put an end to bitter medicines.

Meanwhile, the government made progress with the Social Security reform, which tried to combat distortions in the public service and which was sent to the Chamber in August and approved by the Senate at the end of that year.

“I cry, because I dedicated the best years of my life to the PT, where I learned values ​​such as the defense of workers’ rights that, today, the PT government wants to treat as if they had been concessions from the elites or politicians”, said Heloísa Helena, when he got emotional in a speech against the reform.

For Celso Rocha de Barros, doctor in sociology and columnist for Sheetthe party’s radical wing went beyond the criticism of Palocci, voting against government proposals, at a time when the PT needed to convey the message that it could manage to be government.

“After this crisis, the PT still criticized the economic policy, but within certain limits. Things only got better when the good results of the combination of macroeconomic moderation and strong social policies began to appear”, says Barros, who is also the author of the biography “PT, a History”.

In the PT of the Lula 1 era, the conflict ended with the expulsion of the radicals and the victory of Palocci —on December 15, the National Directorate of the PT expelled Heloísa Helena, Babá, Luciana Genro and João Fontes (SE), accused of disobeying guidelines and ostensibly criticizing the government.

Lula supported Palocci’s economic policy until the end. The minister would only fall three years later, after the breach of bank secrecy by the caretaker Francenildo dos Santos Costa, who testified against him at the CPI dos Bingos.

Rocha de Barros says he believes that, in general, the minister wins the battles with the political wing, but the continuous pressure may force the government to adopt more compensatory measures or combine strategies. “In Lula’s second term, for example, moderation in the macroeconomy was accompanied by more public investment.”

Upon assuming his third term, President Lula himself has repeated that he does not expect only praise from his allies, but that they charge the government.

Despite considering the internal dispute healthy, Rocha de Barros adds that caution is needed. “In the first PT city halls, the mayor almost always left because he couldn’t stand the party’s opposition. In the Dilma government, the PT did not bank [o ministro da Fazenda, Joaquim Levy] and the government fell. In the case of fuel, I think Gleisi’s criticism went too far, it seemed like a direct attack on the minister.”

For Pedro Paulo Zahluth Bastos, an economist at Unicamp, the priority should be an anti-cyclical policy at this moment. “This is the basic source of tension, which has Petrobras’ pricing policy as a backdrop and whether it should serve to maximize shareholder profits or whether it is time to increase investments.”

“It’s different from the Palocci era, because everything indicates that Haddad concentrated the adjustment on an expectation of raising revenue, without committing to a very rigid target. The president has also made it clear that the priority is to resume growth and employment. “

A similarity between the two ministers is the possibility of a strong recovery of the Chinese economy, but it is not possible to expect a quick and synchronized recovery of the world economy. The most adverse scenario could be a source of tension that could reduce Haddad’s support, says Bastos. “A policy like Palocci’s would be less likely to work now.”

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FIRE FRIEND

Remember chapters of the clash between Palocci and PT radicals, in 2003

24.jan.03
High interest rates are necessary medicine, says Lula
It’s as if we had a child with a fever and wanted to change doctors and medication. And, between one doctor and another, that child had a fever. You, perhaps, had to give the same medicine”, justified the president when commenting on the high interest rates

1st Feb 03
Government tries to avoid collapse, says Palocci
In a closed meeting with PT senators and deputies, the minister told his party colleagues that the government will be traditional in the economy. When criticized for the economic measures, he countered: “If you have better income, pass it on to me”

3.Feb.03
Paul Singer: Crowd environment prevents discussion of alternatives
One of the founders of the party, an economist, complained about the lack of an in-depth discussion on economic policy. “There must be other alternatives”, he said, recognizing that the measures taken in the economy repeated those of the FHC years

4.feb.03
‘I’ll be tough on radicals’, says Palocci
I will discuss with them [os radicais] calmly, but I’m going to be tough”, said the minister, pointing out that he intended to show that the Lula government’s program was marked by economic moderation and rejection of abrupt changes

6.Aug.03
Lula gives in and House approves pension reform
Government sends a reform that provided for full retirement and parity (retirees have the same readjustment as active employees) only for current employees and instituted, among other changes, the social security contribution of inactive employees

13.dec.03
PT document says rebels joined opposition
“It is not possible to transform criticism into opposition to the government. I do not accept that. I am a government. With autonomy, but I am a government”, said former PT president José Genoino

15.dec.03
Rebels are expelled from PT, ending internal war
The National Directorate of the PT expelled the four congressmen accused of disobeying party guidelines and ostensibly criticizing the federal government