“Spending ceiling is just a symbol”, says Paulo Guedes

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After the government gave the approval for the change in the formula for calculating the spending ceiling in the PEC dos Precatórios, the Minister of Economy, Paulo Guedes, said on Thursday (11) that the fiscal rule is “just a symbol”.

“The spending ceiling is just a symbol, a flag of austerity. We cannot be dogmatic about him. The proof is that if we were to respect the ceiling, it would have been a more aggravated economic and health tragedy [em 2020]. The ceiling is a symbol of a political system that has not yet managed to take responsibility for the budget”, said the minister, participating in Itaú Macro Vision 2021.

The minister also analyzed the situation that led to the imbroglio in the budget allocated to the government’s new social program, Auxílio Brasil.

“Everything was programmed for a Bolsa Família of R$ 300, within the ceiling and the source would be the IR. But they blocked the IR and, without the source, that doesn’t allow for the creation of a permanent program. So, we made adjustments”, said Guedes.

Guedes also said that he is very hopeful with the approval of the PEC dos Precatórios and that the government has reserves to pay the individuals with whom it owes debt.

“Evidently it is not default. If you are saying that you pay cash for everything that is in the ceiling and what is outside, you offer alternatives, such as paying next year or with assets. With the amount of assets that the Brazilian government has, we will not have a queue”, he stated.

For the minister, the most urgent steps are the approval of an administrative reform in the Chamber and the approval of the PEC dos Precatórios in the Senate this year.

“I would do an administrative reform now in the Chamber, I would try to pass Precatório in the Senate this year. Next year we have post offices, we have Eletrobras, that’s no problem for you to do it in January, February, March. What you have to approve now are the social programs because you have to start running this year, you can’t create it in an election year,” he said.

The minister also stated that there should be a slowdown in the country, with the increase in interest rates and the escalation of inflation, but he emphasized that the situation “is normal”.

“Inflation is a monetary phenomenon. Interest rates go up a little, there’s a slowdown, it’s normal. We are in transition from a nationalized economy to a market economy”, he pointed out.

*With Estadão Content and Reuters

Reference: CNN Brasil

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