‘I’ve never seen a market as sensitive as ours’, says Lula after the stock market crash

President-elect Luiz Inácio Lula da Silva (PT) mocked the financial market’s negative reaction to his criticism of the spending cap and fiscal austerity policy. He said he had never seen a market “as sensitive” as the Brazilian one.

Lula spoke to supporters as he left the CCBB (Centro Cultural Banco do Brasil), seat of the transitional government.

Investor discontent, fearing the future government’s fiscal agenda after the president’s speech this morning, contributed to the 4% drop in the Ibovespa, the Brazilian Stock Exchange’s reference index, to 108,964 points. The spot commercial dollar soared 4.08% and closed at R$ 5.3960, on sale.

“The market gets nervous for nothing. I’ve never seen the market as sensitive as ours. It’s funny that this market hasn’t been nervous in four years of [Jair] Bolsonaro (PL)”, replied Lula, after being questioned by journalists about the performance of the stock exchange and the dollar this Thursday.

The PT also spoke about the third victory in presidential elections. “The Brazilian people are extraordinary. I think these people are in need of a little peace, a little tranquility. I hope we can restore the country’s dream, that’s all.”

On October 30, in his first speech after being elected, Lula showed a willingness to seek pacification with half of the electorate that voted for Bolsonaro. The campaign was marked by episodes of hostility, at an unprecedented level of rivalry.

“From January 1, 2023, I will govern for 215 million Brazilians. Not just for those who voted for me. There are not two Brazils. We are a single country, a single people, a great nation,” he said at the time. .

Lula was asked by a supporter about whether there would be debt forgiveness for the 2014 Fies (student financing fund). “You have to understand that Fies is not debt, Fies is a social investment,” he said.

According to data from the FNDE (National Fund for the Development of Education), more than 1 million Fies contracts were in arrears in the payment of installments. Of this total, around 890,000 debtors could request debt renegotiation.

In June, Bolsonaro sanctioned the provisional measure that provides for a discount on the renegotiation of Fies debts. Banks are obliged to grant discounts that can vary between 12% and 99% for payment in a single installment. The outstanding balance can be paid in up to 150 installments, depending on the student’s situation. Renegotiation can be requested until December 31 of this year.

In his morning speech, the president-elect asked “why are people made to suffer to guarantee such fiscal stability in this country?”. “Why do people all the time say that it is necessary to cut spending, that it is necessary to have a surplus, that it is necessary to have a ceiling on expenses? Why don’t we establish a new paradigm?”, he added.

Lula also stated that “some things seen as expenses in this country will come to be seen as investments.”

“It is not possible that money has been cut from the Popular Pharmacy in the name that we have to meet the fiscal target, comply with the golden rule. Do you know what the golden rule is in this country? milk and wake up without having a bread and butter to eat every day.”