Fiscal responsibility is necessary to help the poorest, says Paulo Hartung

Economist and former governor of Espírito Santo, Paulo Hartung, evaluated the CNN, this Saturday (12), that, in order to “take care of the poor and excluded”, the government of president-elect Luiz Inácio Lula da Silva (PT) will need fiscal responsibility.

Hartung’s statement echoes Lula’s speech against the spending cap during the week, which provoked a reaction from the market.

In an interview with CNN, the economist pointed out that the Brazilian economy is “unanchored from the point of view of expectations”. “This since last year when the government postponed the payment of precatories and pierced the spending ceiling with various arguments,” said Hartung.

According to the former governor of Espírito Santo, the Lula government will have to fulfill the task of “reanchoring the country’s economic expectations” so that it can succeed in fighting hunger and poverty.

“Re-anchoring is very important if we want to take care of our priorities, among them the fight against hunger and poverty, which unfortunately increased a lot during the pandemic. But to take care of those who need to be taken care of in the country, we need to be responsible for public accounts,” he said.

“If you don’t give with one hand and take with the other, When you have an unbalanced economy, what you take is superior to what is offered to the poorest. If we really want to put the poorest people in the game, we need to re-anchor expectations and work with fiscal responsibility,” she added.

Regarding the reaction of the stock exchanges after Lula’s statements, Hartung also pointed out that, for the market, “if you give the wrong signals, you will get negative reactions”.

“What we need is not to embark on economic policy paths that have already gone wrong in Brazil, Latin America and around the world,” he declared.

He also evaluated that the Transition PEC that has been articulated by the government “was not the best way”. In his opinion, the transition team needed to have done more robust technical studies on the current situation in Brazil.

“Before articulating politically around the 2023 Budget, we would need technicians to study the reality and build paths for Brazil to follow in a positive way next year. When you go straight to Congress to negotiate politically without a robust study, the possibility of this improvisation generating misdirection for Brazil in 2023 is very large”, concluded Hartung.

🇧🇷 Published by Léo Lopes, produced by Elis Franco, from CNN