BNDES does not compete with Treasury in new fiscal framework, says Mercadante

The president of the BNDES (National Bank for Economic and Social Development), Aloizio Mercadante, said this Monday (13th) that the institution intends to debate fiscal policy, but denied that it will compete with the Ministry of Finance in the elaboration of the new framework for country’s public accounts.

The statement was given to UOL Interview. According to Mercadante, the BNDES will promote a seminar starting at the end of March to analyze international experiences in areas such as fiscal policy. The idea, he said, is to bring reflections amid the government’s promise to replace the spending ceiling.

This event was built in “common agreement” with the Ministry of Finance, commanded by Fernando Haddad, said Mercadante. According to him, by the time the seminar is held, the portfolio should already have prepared a proposal for a fiscal framework to replace the ceiling.

“The seminar will take place after the fiscal framework is ready. There is no way to compete with the fiscal framework, because it will be ready,” he said.

In an interview with SBT last week, Mercadante spoke of debating the proposal with the government. He also said at the time that the BNDES is free to point out ways for Brazil in different matters.

The statements raised discussion about a possible competition with the Ministry of Finance, responsible for the new fiscal framework. This Monday, Mercadante ruled out this competition.

“There is no competition. There is no dispute. Every day is different. Before it was: ‘Mercadante wants the position of Minister of Finance’. No one more than Haddad knows how much I support him, how much I worked and how much I would like him to be at the Farm. We are totally aligned in that direction”, he told UOL Interview.

According to Mercadante, there will be no censorship within the BNDES, and discussion of different subjects will be allowed.

“They [membros do ministério de Haddad] are responsible for the framework of fiscal responsibility. They will work out. The BNDES will bring international experiences and help anchor, substantiate and sustain the Treasury’s proposal. This is what was agreed and will be done [no seminário]”, he completed.

There is room for a drop in interest rates, says Mercadante

In the interview with UOL, Mercadante also considered that there is room for a drop in interest rates in Brazil. “It is evident that there is room for a reduction in the interest rate. We have to discuss what is the rhythm, what is the deadline that this will happen”, he stated.

The performance of the BC (Central Bank) and the level of the Selic rate, currently at 13.75% per year, have been criticized by President Luiz Inácio Lula da Silva (PT).

During Mercadante’s inauguration at the BNDES, a week ago, Lula called the level of interest rates in Brazil a “shame”. The president’s speech, however, has been putting pressure on inflation expectations and the interest rate curve, which has the opposite effect to the intended one.

Mercadante also indicated this Monday that the BNDES does not plan to make new loans for the export of Brazilian services for works in Venezuela. The country is one of those that delayed payments of transfers made by the bank during the PT governments.

“You can have a debt renegotiation, but you don’t make financing for those who are in default. This is not on the agenda”, stated Mercadante, who called the arrears of countries like Venezuela a “completely marginal problem” given the size of the bank wallet.

In his inauguration speech, last week the president of the BNDES defended a “more active” position by the institution, with special attention to industry and smaller companies.

In Mercadante’s view, Brazil cannot just be “the farm of the world”, leaving industrial goods behind while agricultural commodities gain more and more space abroad.