Haddad returns to Brasília to try to end the impasse over the spending cuts package

Since the end of November, more than 20 hours of meetings have been held with ministers and union representatives to discuss the measures

TON MOLINA/FOTOARENA/FOTOARENA/ESTADÃO CONTÚDO
There is resistance from ministers from other departments in relation to changes proposed by Haddad

The Minister of Finance, , will return to Brasília this Monday (11) with the aim of advancing negotiations on a package with President Luiz Inácio Lula da Silva (PT). Since the end of November, more than 20 hours of meetings have been held with ministers and union representatives to discuss the measures. The announcement of the proposals could take a few days, depending on conversations between Haddad and the presidents of the Senate and Chamber.

The search for structural measures that guarantee permanent savings in public accounts is a priority for Haddad and the Minister of Planning, Simone Tebet. However, there is resistance from ministers from other departments in relation to changes that could impact their areas. Among the main proposals under analysis are changes to Fundeb, the Salary Allowance, unemployment insurance and the Continuous Payment Benefit (BPC).

Although the government is not considering delinking payment of the minimum wage to INSS retirees, the possibility of limiting the indexation of the minimum wage to a ceiling of 2.5% is still under discussion. The financial market estimates that the Union will need to save around R$25 billion next year and present another R$30 billion in structural proposals to restore confidence in public accounts.

The most recent data show that the government’s gross debt reached 78.5% in August, while the primary deficit was 2.26% in the 12 months ending in the same month. Inflation is above the established target limit, and the Central Bank has increased the Selic rate, which puts even more pressure on public debt. In this context, cutting spending is seen as an essential solution for the economy, helping to reduce the deficit and control inflation. Leaders of the Workers’ Party (PT) recognize the seriousness of the economic situation, but say that solutions must be found that do not only penalize the most vulnerable.

Published by Felipe Dantas

*Report produced with the help of AI

source