Amid signs of a recovery in GDP, the attention of Planalto Palace and the economic team is drawn to the assessment Federal Supreme Court (STF) Going to Central bank autonomy… Next Friday, 18th, ministers will start virtual plenary session the Court’s analysis of the validity of the law establishing the fixed terms of office of the president and eight directors of the BC. A quiet litigation on a digital platform, where judges only vote for a week without further discussion, could create buzz in the financial market and raise fears in the government.
The bill passed by President Jair Bolsonaro in February this year is contested by two opposition parties: PT this is PSOL – which prompted the STF to abolish the autonomy of the monetary authority. As for the subheadings, this measure drains the power of the federal government to formulate economic guidelines, causing “inconsistent monetary and fiscal policy.” The acronyms also stand for “flaw of initiative”, arguing that the rule should have come about as a result of a project created by the executive branch, and not by the Senate, as it happened.
Additional Law 179, which established the autonomy of the Central Bank, stipulates that the terms of office of the president and directors of the BC will no longer coincide with that of the chief executive. Now, the head of the monetary institution will start work only in the third year of the presidential term – for example, the replacement of the current President of British Columbia, Roberto Campos Neto, will take office only in January 2025. The central one will be updated. every four years. Previously, the president of the BC could be fired at any time for any reason. Dismissal is now limited to objective situations, such as convictions for administrative wrongfulness, or more subjective situations, such as “insufficient effectiveness to achieve the goals” of the institution.
A warning sign with the STF verdict has already lit up in the government after the rapporteur of the action, Ricardo Lewandowski, In March, he turned down a request from the Central Bank itself to accompany the case as a “friend of the court,” a kind of assistant who can make a name for himself in the case file – and in the verdict itself. Appointed to the STF by President Lula, Lewandowski is considered a leftist minister and usually makes decisions in favor of taxpayers on social performance issues.
Concerns were heightened after Federal Attorney General Augusto Aras sent an opinion to the Supreme Court on the conflict with the interests of the Planalto Palace, in other words, agreeing with the arguments put forward by the opposition parties. Although he was an ally of Bolsonaro, Aras defended the overthrow of the law, as it was not an initiative of the executive branch.
Continues after advertising
To prevent the risk of defeat in court, Campos Neto held a marathon of private conversations with ministers to draw their attention to the importance of the law, which, he said, paved the way for institutional and technical improvement of the bookmaker and it is assumed that the economic cycle is separate from the political one, which makes it easier coordination of monetary policy. One of the government’s lines of defense is that the law excludes political interference that could harm the resilience of the Brazilian economy.
At least eight STF ministers have already spoken to the President of British Columbia. According to reports received by VEJA, the arguments put forward by Campos Neto resonated with members of the Court from various wings, such as STF President Luis Fuchs and Minister Gilmar Mendes. The two disagree in their thorny judgments about Operation Lava Yato, but, as in this case, they usually agree on the practical implications of the processes affecting the financial market.
“The possible announcement of the unconstitutionality law during the economic crisis is extremely harmful for the country, as it would deprive the agency responsible for price stability, the efficiency of the financial system and even the promotion of jobs, which should bypass political interference and populist decisions after the vote,” says lawyer Isabela Pompilio , an expert in business law. “The fact that the action was proposed by PSOL and PT only demonstrates the political bias of this action, filed at such an inopportune moment,” he adds.
According to Camilo Onoda Caldas, an expert on political and economic law, a backlash from the market is “almost guaranteed” if the STF abolishes British Columbia’s autonomy. “There are many doubts about the political ability of the government to manage the economic recovery and translate it into an agenda and concrete actions agreed through the Central Bank. President Jair Bolsonaro has already shown that he is capable of interfering with all kinds of institutions if they do not act in accordance with their electoral interests, ”he says.
I wanted to, BK did not show it.
Continues after advertising
