Asked about the country’s fiscal situation, Acting President of the Federal Audit Office (TCU), Minister Bruno Dantas, said the Brazilian Central Bank would be “taking a close look” at what is happening in Brazil. “The central bank will closely monitor what is happening. If we somehow worsen, even unintentionally, fiscal rules, the immediate effect will be an increase in interest rates by the Central Bank,” said Dantas at an event organized by Esfera Brasil. Also participating in the discussion are Central Bank President Roberto Campos Neto and Vice President-elect Geraldo Alkmin.

Dantas maintains a direct dialogue with members of the transitional government. At the panel, he criticized the high public debt-to-GDP ratio and stressed the difficulty of bringing the government budget in line with GDP. “It is useless for us to dream if we do not generate enough wealth to cover these costs,” he said. “The fiscal responsibility agenda is critical, perhaps spending efficiency is more important,” he added.

Also in the social circle, businessman Abilio Diniz said that the main task of the government at the moment is to unite the country and show that it rules for everyone. “We must make the country grow, create jobs with growth, generate income and be inclusive,” said the businessman, who needs to fight hunger and overcome shortcomings in the social machine, and reduce food waste.

“It is useless to want to create jobs by expanding the state machine,” defended Abilio Diniz, who spun off international and treasury reserves, commenting on the high debt-to-GDP ratio.

Fiscal and social responsibility

Bruno Dantas supported the thesis that there is no dichotomy between fiscal and social responsibility. The debate took shape after President-elect Luiz Inácio Lula da Silva (PT) questioned controls on welfare spending to protect public accounts. The leaders of the transitional government have come out in defense of the PT and say that in his eight years of leadership, he never opposed fiscal and social responsibility, but combined these two things.

“Tax liability is the framework on which we are going to build the building. We cannot build a building without a foundation, we cannot talk about government spending if we do not have balanced accounts,” Dantas said at the event.

According to Dantas, there are two main problems in TCU: accountability in relation to fiscal rules and efficiency in relation to public spending. Speaking about the advisability of removing the Bolsa Família from the spending ceiling, as the elected government intends, the minister provoked: “There is a question that needs to be asked to this audience of businessmen, people: to find out if the budget is in line with GDP. We need to talk about wealth distribution, we need to talk about wealth creation,” he said.

Due to difficulties in implementing the Proposed Transitional Constitutional Amendment (PEC), which intends to remove the Bolsa Família from the spending ceiling and open up fiscal space for other social projects, the elected government is considering taking a different path: in the early days of the government, edit the Interim Measure. opening an emergency loan.