Brazil will have a “strict” fiscal policy and Lula will comply with the framework, says Alckmin

by Andrea
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Amid uncertainty about the package of spending-cutting measures, which has not yet been announced, the vice-president Geraldo Alckmin (PSB) tried to reassure the market and stated, this Tuesday (12), that the president’s government Luiz Inácio Lula da Silva (PT) will adopt a “strict” fiscal policy and comply with the fiscal framework.

The statements by Alckmin, who is also Minister of Development, Industry, Commerce and Services, were given during a press conference in Baku, Azerbaijan.

Alckmin represents Lula at the 29th United Nations Conference on Climate Change.

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Asked about the fiscal measures that could be announced by the government this week, Alckmin deflected and said that it would be up to the Minister of Finance, Fernando Haddad (PT)detail the package.

“I attended the meeting last week, on Friday. A very fruitful meeting, and President Lula made it clear that he will strictly comply with the fiscal framework: that is, zero primary deficit. The government is committed to the issue of the fiscal framework”, guaranteed Alckmin.

“It is important to make it clear that Brazil will have a strict fiscal policy, which will allow us to have a better monetary policy for development with lower interest rates”, added the vice-president.

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Last week, Lula had practically daily meetings to discuss the issue – and was still not convinced about what should be announced, although he understood the need for the government to reduce expenses.

Last week, in fact, Lula asked Haddad to postpone an official trip to Europe to stay in Brasília (DF) and participate in meetings about the fiscal package with other ministries. That’s what happened. Even so, there is still no consensus within the government on the measures.

Haddad, who would leave Brasília for São Paulo (SP) last Friday (8), ended up staying in the federal capital to participate in a new round of discussions with Lula and the other ministers. What could be the last meeting on spending cuts, however,. Haddad only went to São Paulo on Friday night, but is already back in Brasília.

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Initially, in an interview with journalists last week, . Market expectations grew and, given the government’s uncertainty in the following days, there was tension among investors and the dollar rose.

Lula and Haddad recognize that, before the government announces the fiscal package, it is necessary to present the measures to the presidents of the Chamber of Deputies, Arthur Lira (PP-AL)and the Senate, Rodrigo Pacheco (PSDB-MG).

On Monday (11), discussed by the federal government. According to information from the newspaper The Globe.

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Proposals on the table

is to “redesign” the salary bonus (a type of 13th salary paid to formal workers who receive up to two minimum wages).

Government members estimate that the benefit – which will cost R$30.7 billion in 2025 – could be more concentrated on the poorest. According to current rules, an increasing number of people have benefited from the bonus, which is driven by the policy of increasing the minimum wage.

On the other hand, the decoupling of social benefits, such as the bonus and the Continuous Payment Benefit (BPC), in relation to the minimum wage, has been ruled out by the government.

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There are still those in the economic team who defend that the health and education floors be changed, but the measure does not have the sympathy of Lula and the government’s social ministers. So far, the simulations presented to the President of the Republic indicate that there would be a

One of the pillars of the measures presented by the Ministry of Finance to Lula would be the adoption of instruments that would help optimize the review of social policies, minimizing possible irregularities. One of the ideas raised is the requirement for biometrics.

Another important step would be to expand the target audience for the review, previously restricted to people whose registration is more than 48 months out of date. With the expansion, this time would be reduced to 24 months.

(Com Reuters)

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