PT sees proximity between Campos Neto and Bolsonarism; former leaders see technical performance

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The president of the Central Bank, Roberto Campos Neto, came under the radar of members of the government, including Luiz Inácio Lula da Silva (PT), who exploit his proximity to Bolsonarist politicians to increase the weariness of the head of the monetary authority.

Former Esplanada colleagues and former BC leaders heard by the Sheethowever, minimize the moments in which Campos Neto showed greater proximity to the Jair Bolsonaro (PL) government and say that his performance has been strictly technical at the head of the institution.

The PT relationship was considered cordial with Campos Neto until the BC maintained the basic rate (Selic) at 13.75% per year and indicated that it could sustain high interest rates for longer. In Lula’s eyes, the president of the autarchy went from being a “competent economist” on the eve of the elections to being “that citizen” at the end of the first month in office.

When contacted, Campos Neto said through his advisory that he would not speak out.

With the fear that high interest rates would compromise the growth of the Brazilian economy, Lula and interlocutors returned to the charge against Campos Neto, rescuing different episodes to reinforce his ties with Bolsonaro.

The most recent episode recalled by PT members to corroborate the BC president’s lack of impartiality is an image of the photographer of Sheet Gabriela Biló, showing that Campos Neto was still a member of a WhatsApp group called “Bolsonaro Ministers”. He lost his ministerial status when the Central Bank’s autonomy law was approved by the National Congress in February 2021.

After the image of the cell phone screen of Senator Ciro Nogueira (former Civil House) was made public, revealing the presence of the head of the municipality in the chat, on January 10, Campos Neto left the group. But the exposure of the photo generated discomfort among PT members.

Campos Neto also made a “back and forth” between Brasília and São Paulo, on January 1st, which caught the attention of Lula’s allies. In the morning, he participated in the inauguration of Tarcísio de Freitas, former Minister of Infrastructure in the Bolsonaro government, elected governor of São Paulo after being sponsored by the former president. It was the only ceremony at the state level that had the presence of the president of the BC.

In the afternoon, Campos Neto flew back to Brasília, where he attended Lula’s inauguration ceremony. Hours later, he took another plane to São Paulo to attend a dinner hosted by Tarcísio, a former colleague from Esplanada.

During the Bolsonaro government, Campos Neto attended fraternizations alongside other Bolsonaristas. In 2021, he went to a barbecue at the house of the then Minister Fábio Faria (Communications), days after Nogueira took office.

Although he was never part of the former chief executive’s inner circle, Campos Neto enjoyed the sympathy of different wings of the government and Bolsonaro himself. Despite the BC’s autonomy, he participated in meetings with members of the Planalto in which he was consulted on the impacts of possible government measures on the economy.

Campos Neto was elevated to the post of head of the monetary authority under the influence of the then Minister Paulo Guedes (Economy). The two had disagreements, but continued to act together.

According to past management assistants, the fact that Campos Neto was always cited as a possible Minister of Economy at times when Guedes was experiencing turbulence in charge of the portfolio weighed heavily on their relationship.

From members of the political wing to more radical Bolsonarists and parliamentarians, they welcomed an eventual administration of Campos Neto. He, however, always rejected this possibility. In private conversations, he said that he had no intention of becoming a minister – especially to take Guedes’ place.

Faced with attacks by the new government on Campos Neto, former colleagues from Esplanada came out in defense of the leader. The assessment is that PT members are looking for someone to blame in case the economy does not take off.

To interlocutors, the BC president said that he is just doing his job and that there is no way to reduce inflation just because the government wants to.

The national president of the PT, Gleisi Hoffmann (PR), is identified as one of the main voices criticizing Campos Neto around the president.

In the most recent fry episode, she told Sheet that the head of the institution is on Bolsonaro’s side and also defended that monetary policy obey the line advocated by President Lula.

“The president of the Central Bank was in a group of Bolsonaro ministers until recently. So he has a side. Bolsonaro’s side. He was appointed by him. He did not demonstrate his autonomy, his political independence, because of these facts. When the bank has the decision to keep rates at current levels, it plays against Brazil”, he said.

Despite the artillery, there are PT supporters who believe that Lula is more damaging to the economic scenario with his statements, although grassroots leaders supported Lula’s speech against the basic interest rate at a meeting in the Planalto.

In recent weeks, Lula called interest rates a “shame”, BC autonomy “nonsense” and attacked Campos Neto, further straining the relationship.

For former BC members, however, Campos Neto’s performance at the head of the institution has been guided by purely technical decisions.

Gustavo Loyola, former BC president and CEO of Tendências Consultoria, highlights the cycle of high interest rates promoted by the institution throughout the election year, which could compromise the image of then-president Bolsonaro in his quest for re-election.

From March 2021, when the basic rate left its historic floor (2%), to August 2022, there were 12 consecutive increases, with an increase of 11.75 percentage points.

“If he [Campos Neto] wanted to please the former president [Bolsonaro], would have kept monetary policy loose. The BC acted in an absolutely technical way, there was no measure that could be seen as political”, he says.

Loyola points out that, with autonomy, the BC ceased to be a government body to become a state institution. For him, this needs to be respected by the new government and episodes involving the figure of Campos Neto are not “a justification for institutionally attacking the Central Bank”.

In the opinion of Luiz Fernando Figueiredo, former BC director and chairman of the Jive Investments board, Campos Neto’s work at the helm of the institution is “impeccable”.

He recalls that the Brazilian monetary authority was at the forefront in diagnosing inflation during the pandemic. “We are the most advanced country on the path of monetary policy,” he says. “Indeed, the interest is high, but it is high for a necessity, not for political bias”.

Former director of BC, Alexandre Schwartsman also points out that decisions on interest rates are not taken only by the president, but by a collegiate formed by nine members (besides Campos Neto, eight directors).

The economist adds that the committee did not shy away from taking the Selic to the lowest level ever observed, with a negative real interest rate, when it saw the need to stimulate economic activity. “The same committee that lowered it to 2% brought it back to 13.75%. The decision is eminently technical”, he says.

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