It’s as if transition rescued Dilma’s BNDES, says Maílson about possible return of subsidized credit

Economist and former Finance Minister Maílson da Nobrega criticized recent statements made by the transition team of the elected government, with emphasis on the BNDES (National Bank for Economic and Social Development).

“My hope is that Lula will not take into account changes that are emerging in the transitional cabinet, including utterly meaningless statements about the BNDES. It is as if the PT leaders who are in the transitional cabinet were dealing with the BNDES at the time of Dilma,” he said this Sunday (11) in an interview with CNN.

The economist is referring to the TLP (Long-Term Interest Rate), in force since 2018 at the development bank. The rate is seen as successful by the market for correcting a series of distortions created by its predecessor, the TJLP, since it eliminated subsidies granted by the Treasury to loans made by the bank.

In a recent press conference, Aloízio Mercadante, quoted to assume the presidency of the institution, criticized TLP, which raised concerns from economic agents.

“It is good to remember that President Dilma transferred 10% of GDP in Treasury resources to the BNDES to distribute subsidies to national champions, which today is equivalent to approximately R$ 1 trillion. The BNDES reached the point of being bigger than the World Bank, which makes no sense at all,” said Maílson.

Maílson points out that the TLP contributed to making a capital market scenario viable with a long-term credit provider for sectors such as industry, services and agriculture. Barring this movement, he says, would bar the capital market as a source of long-term credit.

“(The elimination of the TJLP allowed) a true revolution in the credit system in Brazil, in relation to long-term interest rates, since subsidized credit jettisoned this process in the capital market, because the BNDES lent at interest rates below the market , so no one could lend because you can’t make subsidies with money from the private sector”, he explains.

“It is expected, therefore, that Haddad manages to throw in the trash these ideas that are emerging in the transition cabinet, adequately advise President-elect Lula for the understanding that we have a very serious fiscal crisis, which will require an adjustment that is difficult to conceive by its political difficulty”.

See the full interview at the link.

*Published by Ligia Tuon. Production by Ester Cassavia, under the supervision of Jorge Fernando Rodrigues

Source: CNN Brasil

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