Former Brazil Central Bank governor advocates reducing public debt

Henrique Meirelles, a financial executive who has formerly served as governor of Brazil's Central Bank, said Monday (May 2) that reducing Brazil's public debt is a priority. Touted as a potential choice to run the Ministry of Finance should Vice-President Michel Temer take over upon President Dilma Rousseff's impeachment by Senate, Meirelles had a nearly five-hour meeting with Temer and endorsed proposals for concession contracts with the private sector and a cap on government spending.

“We should take steps that can effectively change the government debt hike in order to mitigate risk and enable a deflection of interest rates,” Meirelles said as he left Temer's official residence.

According to the former Central Bank governor, “legal control” of the spending trend is one “compelling alternative” that should be adopted in case Temer takes up the reins.

For Meirelles, Brazil needs to regain confidence. “On the one hand, there must be clear signs that the hike in government debt is slowing down so we can shift the confidence index to drive more investment, thus creating more jobs and increasing consumption. That's what the country expects.”

Meirelles said the government can afford to meet the cost of the increase in the amount of benefits paid under the Bolsa Família conditional cash transfer program and income tax bracket values announced by President Rousseff Sunday (May 1st) and criticized by the opposition. “Our country is able to meet its commitments. The whole point is cost, and what steps to take,” he pointed out.

Despite his statements on economic policy, Meirelles said he has not been officially invited by Temer to join a post-impeachment government. “But undoubtedly there is a set of measures [that can be adopted], and the whole point is discussing what the priorities are and what can, and should, be done.”

Translated by Mayra Borges