Under pressure from Congress due to the Lula government’s opposition to agendas costing tens of billions of reais to the public coffers, Fernando Haddad receives this Thursday the president of the Central Bank, Roberto Campos Neto, for a private conversation in São Paulo .
The meeting will be the day after Moody’s reviews Brazil’s credit rating outlook from neutral to positive and on the eve of the next Copom meeting, scheduled for May 7th and 8th.
With the imminent decision on the basic interest rate, the Selic, currently at 10.75% per year, Campos Neto and all directors of the Central Bank are in the Copom’s period of silence, during which they cannot express opinions in speeches , press interviews and meetings with investors, market analysts and other interested agents.
The main focus of political friction between the Lula government and Congress at the moment, the impasse surrounding the exemption from payroll in 17 sectors of the economy and municipalities with up to 156,000 inhabitants also leads to concerns about fiscal responsibility – one of the factors that influence the decisions of the Central Bank.
There is also the Perse project, to help the events sector, with an estimated cost of 15 billion reais over three years, which was sanctioned by Lula, and the PEC dos Quinquênios, which grants a 5% increase for every five years of service for various categories of the civil service elite and, in the current version, will cost at least 81.6 billion reais by 2026.
Continues after advertising
At an event organized by trade unions for Labor Day, Lula defended his veto on exemption (already overturned by Congress) and said that he is against benefits to companies without commitment to job creation or guarantees for workers. “In our country, there will be no tax relief to favor the richest, but rather, to favor those who work and live on wages,” he declared.
Dario Durigan, who is executive secretary of the Ministry of Finance and, therefore, Haddad’s right-hand man, criticized the pressure to extend the exemption and stated in an interview with InfoMoney on Tuesday that, “if we have a tax benefit (what) corrupts the basis of fiscal responsibility, it may be that interest rates in the country do not fall as expected”.
Another context that involves the meeting with Haddad is the succession of the BC presidency, as Campos Neto’s term runs until December 31st. The economist publicly defended that the transition begins before his departure, which would require Lula to nominate the next president this year.
Lula, in turn, stated in a coffee with journalists at the end of April that he has not yet decided whether he will bring forward the appointment to command the municipality or do it only after Campos Neto leaves office.
