New fiscal rule combines debt curve, surplus and spending control, says Alckmin – 03/20/2023 – Market

The new fiscal rule to be presented by the government should combine the public debt curve, the primary surplus and a spending control mechanism, vice-president Geraldo Alckmin (PSB) said this Monday (20).

According to him, however, President Luiz Inácio Lula da Silva (PT) has not yet given the final word on the proposal.

Alckmin did not detail the operation of the new anchor, which will replace the spending cap (mechanism that limits the growth of expenses to inflation variation), nor its parameters, but evaluated that, in general, the rule was “well conceived”.

He avoided mentioning any adjustments requested by the petista. “President Lula has not yet given the final word, but it was well conceived, good engineering”, said the vice president, after participating in a seminar promoted by the BNDES (National Bank for Economic and Social Development) to discuss sustainable development and experiences international organizations in areas such as fiscal policy.

According to him, the purpose of the rule is to keep the trajectory of public debt under control and allow public investments to be carried out.

“The entire government has discussed it in a very harmonious way, within the principle of having a fiscal anchorage that controls the growth of the debt and, on the other hand, that allows for the investment necessary for growth,” he said.

Asked about the possibility of investments being outside the reach of mechanisms for controlling expenses, the vice president avoided commenting. “Let the president announce the new fiscal anchor at the right time,” he said.

Alckmin cited general principles of the rule during his speech at the opening of the seminar. “In the coming days, the government is forwarding the fiscal anchoring project, which will also intelligently combine the debt curve, the surplus on the one hand, and spending control on the other,” he said.

The details were discussed internally by the government at a meeting held on Friday (17).

The Minister of Finance, Fernando Haddad (PT), has been treating the matter with a lot of reserve. In the folder, only some of its secretaries participate in the discussions.

On Friday, the meeting at the Planalto Palace had restricted participation: Haddad presented the text to Lula, Alckmin and ministers Simone Tebet (Planning and Budget), Rui Costa (Cabinet) and Esther Dweck (Management and Innovation in Public Services).

As shown to SheetLula asked the Minister of Finance to broaden conversations with the political world and with economists, in addition to making new calculations on the proposal for a new rule, which will replace the spending ceiling.

This Monday, Haddad should have a series of meetings to discuss the new rule with leaders in Congress.

Amid the expectation for the details of the proposal, the president of the PT, Gleisi Hoffmann, published a message on social networks on Saturday (18) in which she defends the need to increase public investments, which means that the proposal for a new fiscal framework should be flexible for certain expenses.