We don’t want such a restrictive tax, says PT deputy – 03/20/2023 – Market

The new fiscal rule to be presented by the Ministry of Finance needs to provide a gradual adjustment in public accounts so as not to threaten economic growth and, thus, throw Brazil into a “violent political crisis”, said this Monday (20) deputy Lindbergh Farias (PT-RJ).

According to him, parliamentarians of the acronym and President Luiz Inácio Lula da Silva (PT) are concerned about boosting growth to avoid political risk.

The statement comes at a time when the Minister of Finance, Fernando Haddad (PT), is discussing the final details of the proposal for a new fiscal rule. This Monday, at Lula’s request, the minister has dedicated himself to presenting the project to congressional leaders.

“The center, for me, has to be the economy growing. If we grow 0.89% [em 2023], as the market is saying, and 1.5% next year, we are going to have a serious political crisis in this country. The government is going to have difficulties,” said Lindbergh after attending a seminar on sustainable development promoted by the BNDES (National Bank for Economic and Social Development).

“We are going to have a violent political crisis in the country. Destabilization, protests in the streets, a climate of malaise, rising unemployment”, added the deputy, saying that this environment could again serve as a lever for former president Jair Bolsonaro (PL ).

The president of the PT, Gleisi Hoffmann, who also attended the event, said that she was still unaware of the details of the rule and avoided making assessments.

“I think the main thing is to have a countercyclical mechanism. When you have crises, you have more investment. But I don’t know. It has to wait for us to be able to evaluate”, he said.

Lindbergh said higher economic growth is essential to ward off political risk. “There are two issues here: the monetary policy problem, and we don’t want anything that is so restrictive in the fiscal issue, because if it isn’t the perfect storm,” she said.

According to him, this does not mean that the PT will not support Haddad’s proposal, but he stressed that the bench wants to discuss the terms. “What you can’t have is, in a situation of serious deceleration, a very strong monetary and fiscal tightening next year. .

He also said that the PT cannot repeat the “Levy episode”. In 2015, after being re-elected, the former president appointed Joaquim Levy, an economist with a liberal bias and nicknamed “scissor hands” (in reference to cutting costs), to head the Ministry of Finance.

Levy’s choice took place in a context in which Dilma was pressured by the sharp deterioration of public finances, by the tax pedaling scandal and by the creative accounting adopted in her first term to make up the situation of the country’s accounts.

Levy remained in office for 11 months, a period in which he fought and lost a series of clashes in an attempt to review benefits and exemptions and rescue fiscal credibility. His quick adjustment proposal was criticized by the PT.

“The party has a reading today that lacked a more critical sense at that moment. That scared, threw the country into a recession, overthrew Dilma. It is precisely what we do not want to happen”, said Lindbergh.

The deputy’s assessment is that Haddad will be able to come up with a project that “points more to the medium and long term”. “It has to be a more gradual thing,” he said.

The deputy also said he found it difficult for the country to have zero primary deficit in 2024, as members of the economic team even considered.

“I don’t know if you can say that the primary deficit is zero the next year, because if the economy slows down a lot, all logic shows that when the economy slows down a lot, you have to increase investment a little,” he said.