Brazil’s Finance Ministry has finalized proposal for new fiscal framework, says Haddad

BRASILIA (Reuters) – Brazilian Finance Minister Fernando Haddad said on Monday that his ministry has finalized its contribution to the design of the country’s new fiscal framework, but highlighted that other ministries will still evaluate it before the president.

“We have finalized the design of the fiscal framework internally and now I will discuss it with the economic team before presenting it to President Luiz Inacio Lula da Silva, because it cannot be a Finance Ministry proposal,” Haddad told journalists at the ministry.

“It will be a proposal from the society, because it will involve a complementary bill to be approved by Congress,” he added.

Haddad also stated that Lula has commissioned the development of a system behind the so-called Desenrola program, aimed at refinancing consumer debt with government guarantees. The program will be launched when there is an estimate of when the system will be ready.

According to Haddad, the program’s guarantee fund will have about 10 billion reais ($1.9 billion), an amount that will be sufficient to renegotiate 50 billion reais in debt from 37 million individuals.

The program will not have an income limit, but only those who earn up to two minimum wages will have their renegotiation guaranteed by government funds, allowing them to receive greater discounts, said the minister.

He also stated that he has been sending suggestions to Lula for two director positions in the central bank. The president will dedicate March to analyzing the resumes, said Haddad.

Both the terms of Bruno Serra, director of Monetary Policy, and Paulo Souza, director of Supervision, expired in February. However, they can remain in office until replaced.

($1 = 5.1538 reais)

(Reporting by Victor Borges; Editing by Alistair Bell)