Making his finance ministry debut, Fernando Haddad is already facing public attrition after being challenged by President Luiz Inácio Lula da Silva and having to give way on the fuel exemption issue, two sources familiar with the matter said , indicating that it has a complex balance between its public finance adjustment plans and the influence of the political wing on the Planalto.
Tested his persuasive power over Lula, Haddad maintained his speech this week on the importance of fiscally responsible management, but without presenting concrete initiatives, which will happen only after the measures are reviewed by the president.
The backlash led by Haddad demonstrates that while being listened to and respected by Lula, the minister may not have the final say on critical economic issues that could have a political impact, a perception that has motivated part of the negative market reaction in the first days of government.
According to one of the sources interviewed by Reuters, between December 26 and 27, days before Lula took office, then Economy Minister Paulo Guedes offered the transition team another 90 days of exemption from federal taxes on the fuel, which would give the new government time to make a structural decision on the territory.
Haddad was against the extension of the benefit and, according to the report, preferred to use the more than 50 billion reais of annual cost of the measure to improve the fiscal result and increase social spending. In negotiations with Guedes, he argued that 90 days was too much and ended up closing the deal in 30 days.
As soon as the information began to circulate behind the scenes in Brasilia, Lula called his future minister for an interview and ruled that the deal be cancelled. Haddad delivered the message to Guedes and sent his adviser to inform the press: the exemption will expire on December 31, 2022 at Lula’s request.
Over the next few days, the president-elect received a series of names at a Brasilia hotel to discuss the matter. The talks were attended by Haddad, the president of the PT, Gleisi Hoffmann, and the future president of the BNDES, Aloizio Mercadante, as well as the future minister of Mines and Energy, Senator Alexandre Silveira, and the presidential candidate of Petrobras, Senator Jean Paul Prates.
After the battery of meetings, Lula changed his mind, according to the source, and agreed that the new government would renew the exemption as soon as it took office. What weighed in the president’s decision, according to a second source interviewed by Reuters, was the suspicion that the current Petrobras board of directors – also appointed by Jair Bolsonaro – could raise fuel prices, which would have an even greater impact. greater.
According to this interlocutor, the future finance minister would still have tried to convince the president that it was better not to extend the benefit, but said that if the decision were to extend it, he would undertake to absorb the impact and wear and tear generated by the change of direction .
In an interview after the enactment of the provision, which extended the benefit for petrol and alcohol by two months and a year for other inputs, Haddad said that Lula wants to wait for the new Petrobras board to take office before making a decision on fuels.
SHARED POWER AND FRIENDLY FIRE
Haddad inherited his post from superminister Paulo Guedes, who concentrated economic power over Jair Bolsonaro, who publicly assumed he did not understand economics. Lula, however, has already declared that he is interested in the subject and will be actively involved in the definitions.
In the new government, the economy portfolio has been cut into slices and Haddad will have to divide power and negotiate with three ministers in the area. The economic team is made up of Esther Dweck (Management), with leftist views, while Vice President Geraldo Alckimin (Development) and Simone Tebet (Planning) represent the alliance Lula forged with the center of the political spectrum to get elected.
The quartet has issued declarations of unity and responsibility in the management of public finances. However, Haddad is the target of friendly fire within the PT, having internal disagreements with party members who are close to Lula.
The minister will have to face this resistance to put into practice measures such as the revision of other tax exemptions and the replacement of the spending ceiling with a tax rule that gives sustainability to the public debt.
The preliminary scenario built by Haddad’s team carries with it a series of initiatives that could generate a fiscal improvement of up to 223 billion reais in the accounts this year, including unpopular actions such as the reabsorption of the IPI and a review of government programs.
However, the so-called “flight plan” for Haddad’s management will be made official only after analysis, debate and approval by Lula.
+The best content in your email for free. Choose your favorite Terra newsletter. Click here!
Source: Terra
Camila Luna is a writer at Gossipify, where she covers the latest movies and television series. With a passion for all things entertainment, Camila brings her unique perspective to her writing and offers readers an inside look at the industry. Camila is a graduate from the University of California, Los Angeles (UCLA) with a degree in English and is also a avid movie watcher.
