Haddad makes detailed presentation of fiscal framework to Lula, announcement must…

Haddad makes detailed presentation of fiscal framework to Lula, announcement must…

By Lisandra Paraguassu

BRASILIA (Reuters) – The discussion on the new fiscal framework, presented to President Luiz Inácio Lula da Silva this Friday by Finance Minister Fernando Haddad, will continue at a meeting of the Budget Board on Monday and the final text should be released before the president’s trip to China on the 24th, two sources who followed the discussion told Reuters.

According to the sources, who spoke on condition of anonymity, Haddad made a detailed presentation of the proposal during the nearly three-hour meeting, and opened the topic for discussion. There has been no official announcement, which should only happen after the president gives final approval.

In addition to Haddad and Lula, the meeting was attended by the ministers of Development, Industry, Trade and Services, vice-president Geraldo Alckmin; from the Civil House, Rui Costa; from Planning and Budget, Simone Tebet; and Management and Innovation in Public Services, Esther Dweck.

Lula received the proposal prepared by the economic team on Wednesday and stated that he would like to have the project defined before his trip to China on the 24th of this month. On the same day, Haddad said that Lula would decide whether the government’s proposal for the new framework would be released before the next meeting of the Central Bank’s Monetary Policy Committee (Copom), scheduled for next week.

The collegiate meeting starts on Tuesday and ends on Wednesday, the 22nd, when the BC will release the Selic (the basic interest rate), currently at 13.75% per annum.

The expectation is that the processing of the proposal will be discussed with the presidents of the Chamber, Arthur Lira (PP-AL), and of the Senate, Rodrigo Pacheco (PSD-MG), during Lula’s trip to China. The two parliamentarians will accompany the president, as well as the Minister of Finance.

The Budget Board that will debate the proposal on Monday is made up of the Chief of Staff himself, plus the heads of Finance and Planning and Management, in addition to other members of the economic team.

According to Haddad, the fiscal framework will be a new rule for monitoring public accounts that will provide a “sustainable horizon”, but it will not be a debt rule. According to him, the government sought to make a combination between the Fiscal Responsibility Law and the spending ceiling “which removes the defects” of these instruments.

(Additional reporting by Bernardo Caram)


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