“Brazil has hired a fiscal crisis. It can happen in two or three years.” This is the diagnosis that former Finance Minister Maílson da Nóbrega did to CNN interviews Final wean of the week.
According to Maílson, the risk arises from the continuous advance of mandatory expenses. Currently, more than 90% of the federal budget is committed to fixed expenses.
“These expenses are concentrated on social security, personnel, health, education, social programs and, in the current management, investments. There are 4% left for the government to do the rest. It will be.”
“Worldwide, on average, governments have 50%of the budget to define priorities. In the United States, this number reaches 70%. No one reaches 96%.”
Risk of stoppage of the public machine
Given this scenario, Nobrega projects a shutdown – Partial stoppage of the public machine – already in 2027, “at most”. Still, it does not believe that the stoppage will actually occur. “What I think will happen is the government to abandon the fiscal framework,” he says.
To avoid this collapse, one of the ways would be the realization of. But, according to Maílson, because of the rules of the 1988 Constitution, this hypothesis is unfeasible.
“I would say, with no chance of making a chance: it’s impossible. The government can postpone, make a contingency, cancel a money, but then have to go back.
No environment for reforms
Maílson estimates that the current political environment is uncomfortable for structural reforms. He says he was optimistic about the congressional reformist speech and the interactions between government and parliamentarians, but that the meeting of the economic team with the Legislative leaders and was “a shower of cold water.”
To reverse the fiscal scenario, the former minister points out two urgent measures: a new pension reform-“much bolder” than the previous one-and the end of the binding between the minimum wage and social security benefits.
“This fiscal crisis will generate the fright. And this fright will lead society and opinion makers to a sense of urgency. There are the political conditions for approval by the National Congress. The great cycles of structural reforms in Brazil occurred in the context of crisis.”
“Budget Sanatorium”
In referring to Brazilian public accounts as “a sanatorium”, Maílson defends the search for budget health. For him, a more rational system with viable tax rules can reduce uncertainties and boost the country’s innovation and productivity.
“Brazil only grows less again, to continue to have the dream of being a rich country, increasing productivity.”
