President Lula and his Finance Minister, Fernando Haddad, at the Planalto Palace, Brasilia / AFP
BRASILIA
The president of Brazil, Luiz Inácio Lula da Silva, yesterday criticized the financial market again, which he described as “inhumane” and said that he “has no heart” for perceiving social programs as an expense and not as “investments.”
“What is the concern that people can have with the current government? (…) It is the State that has to take care of the people. The market does not have a heart, it does not have humanism,” Lula said during a breakfast with journalists.
“The Government has the obligation to attend to those most in need, period,” he emphasized.
According to the progressive leader, the reactions of investors in the market, who have collapsed the stock market on several occasions due to the threat they see of fiscal risk, have left him “irritated.”
The Brazilian president insisted that it is the State that has to care for the most needy people and that it is the one that has acted in the face of major problems, such as the Covid-19 pandemic.
“I have never seen Febraban (Brazilian Federation of Banks) come together and say that they are going to send part of their money to serve the people on the street. It is the State that has to do that, ”he asserted.
During the meeting with the press, Lula also criticized the high interest rates and said that the poor pay more taxes than the rich.
AMBITIOUS ECONOMIC PLAN
Meanwhile, the Brazilian Finance Minister, Fernando Haddad, yesterday presented a first set of measures that the Lula government will adopt to reduce the country’s fiscal deficit, which are focused on increasing collection.
The package includes the increase in taxes on large companies and fuels, the fractioning of fiscal debts and the reduction of public spending.
The announced measures seek to reduce, or even eliminate, the primary deficit (not including resources earmarked for debt interest payments) of 231.55 billion reais (about 46.31 billion dollars) forecast in government accounts this year.
If the measures are effective, Brazil could close 2023 with a primary surplus of 11,130 million reais (about 2,226 million dollars), according to the ministry’s calculations.
According to the portfolio, the set of measures may have a fiscal impact of approximately 242,600 million reais (48,520 million dollars), which would be equivalent to 2.26 percent of the Gross Domestic Product (GDP).
According to Haddad, 2022 was a “very complicated” year from a fiscal point of view because “very irresponsible” measures were taken by the government of Jair Bolsonaro without considering the consequences that would occur in the near future.
“We are going to fix the house and make the economy grow,” Haddad said at a press conference, after the presentation of the measures.
The minister, however, emphasized that the measures will be accompanied step by step, because although the budget is still being “balanced” this year, there may be “frustrations” that will force the adoption of other regulations.
Among the measures, the launch of a new program to pay, with monthly installments and reductions, the debts of companies and taxpayers with the Treasury that have already expired, stands out. Also, the elimination of a rule that benefited taxpayers with debts to the Treasury of less than 15 million reais (about 3 million dollars).
