If Lula does not respond quickly to the population’s desires, the government will go down the drain, says Mantega

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A member of the transitional government, former Finance Minister Guido Mantega says that it is necessary to give top priority to the poorest population so that the government does not weaken and that this is behind the questioning made by Luiz Inácio Lula da Silva (PT) to demands tax this week.

“He doesn’t want to start the government with his hands tied. Because, if he doesn’t, he won’t go far. If he doesn’t manage to quickly meet the needs of this population, the government will go down the drain”, he tells the newspaper. Sheet🇧🇷 “If he makes a mediocre government like Bolsonaro, he will lose political strength”, he says.

Brazil’s longest-serving finance minister says he will not hold any portfolio again and claims that Lula was misunderstood this week, reinforcing the tidying brake that the party decided to give the day after the stock market crashed as a result of PT’s speeches. . Earlier, PT president Gleisi Hoffmann spoke of fiscal responsibility “in the first place” and said that social and public accounts can walk together.

“There is no antagonism [entre fiscal e social]”, says Mantega. “If you heard the speech, he spoke [também] ‘look, I was the president who most kept the public accounts balanced in the history of Brazil'”, says the former minister.

However, Mantega points out that emergency spending will be needed next year and that it is necessary to stimulate the rate of investment in Brazil, including using public coffers — but also arousing the interest of private investors. “The Bolsonaro government let investment fall and took the dynamism out of the economy. So we need to recover that dynamism,” he said.

According to him, the government will need a license of BRL 150 billion to BRL 200 billion outside the ceiling in 2023 — including to make the growth rate go beyond the 0.5% estimated by him in 2023. priced by the market, he says. The final numbers, under discussion through the PEC (Proposed Amendment to the Constitution) of the Transition, should only be defined after a conversation with Congress.

“This money will come back, because this population [mais pobre] consume. You will have an increase in revenue”, he says. “It will help mobilize the economy as well. I mean, it’s not just an expense, right? It’s also a stimulus,” she says.

Then, during the coming year, the country’s new fiscal anchor should be discussed to guide medium and long-term expectations. There are different formats still under discussion for the new fiscal rule, and among the models analyzed is taking investments out of the spending cap.

Another is to establish a logic for primary result targets that vary according to the condition of the economy — the need for a higher surplus in good times and a smaller amount (or even a deficit) in times of economic downturn.

But the matter is not unanimous even within the PT, says the former minister. Mantega denies market rumors that the new government wants a broad repeal of the fiscal framework — which would include, in addition to the spending cap, also the golden rule (which avoids indebtedness for current spending) and the primary result target itself. “I’ve never heard of this and I think it’s unlikely this is happening,” he says.

Mantega says that his work on the transition will be limited to rebuilding the former Ministry of Planning, including to once again receive the Federal Budget Secretariat (today under the umbrella of the Economy). He rules out being a minister in this and any other area.

The economists chosen for the transition in the economy are Persio Arida, André Lara Resende, Nelson Barbosa and Guilherme Mello. For Mantega, it is a very high-level team that brings together different thoughts. “Now is the time for us to bring our thoughts together to converge on proposals that are satisfactory for everyone”, he says. “It doesn’t mean they’re going to define the strategy. You already have a strategy in place and they’re going to help with the details of it,” he says.

Mantega agrees with the statement by one of them, Persio Arida, that the government cannot make a mistake at the start. “I think this idea is quite healthy. You can’t burn the start,” he says. “But you can’t dive into the stagnation that Bolsonaro left either. You can’t stay the same either.”

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