New anchor must be tied to expenses, not debt, Meirelles tells CNN

In an interview with CNN this Thursday (1st), the former finance minister, Henrique Meirelles, assessed that the formulation of a new fiscal anchor — necessary after the burst in the spending ceiling with the Transition PEC — should be linked to the containment of government expenditures rather than a public debt target.

“I think that the debt target is unfeasible in practice and, if it is set, we will realize it over time”, he declared.

“Public debt is influenced by the interest rate, and not only that of the Central Bank, but that paid by the National Treasury in the market. The government does not control this rate. Let’s assume that insecurity increases at a certain point, the interest rate rises and the ceiling breaks. What will the government do? Won’t you pay the interest?”

In Meirelles’ view, the federal government must set goals regarding what it controls, “and what it controls are expenses.”

“Any fiscal anchor measure, be it the current ceiling or another one with any changes, has to be done on expenses, not on debts.”

The former Minister of Finance also commented on the progress of the Transition PEC in the National Congress, the appointment of names to ministries linked to the Economy and whether or not to consider joining the new government.