Chief of Staff dispels rumors of Finance Minister resignation

Chief of Staff Aloizio Mercadante has denied rumors that Finance Minister Joaquim Levy is going to resign. “He has a commitment to Brazil, a commitment to our efforts. And as the Finance Minister, he knows how important his job is for the world's seventh-biggest economy,” Mercadante said following a meeting with President Dilma Rousseff at Palácio do Planalto on Thursday (Sept. 3). Also at the meeting were Minister Levy and the Minister of Planning, Nelson Barbosa.

Mercadante said that “in times of instability, the ill-informed and the evil-minded up as some people are speculating and trying to cash in on turbulence. But you can rest assured that this is not part of the government's agenda and he [Levy] himself said he's with the team and will keep working for Brazil.”

According to Mercadante, as the government drafted the budget proposal, it tried to cut down discretionary spending, especially from government programs. However, he said, fiscal balance also depends on “the other side”, particularly on cutting down on the so-called mandatory costs including Social Security, civil service payroll, and the Organic Social Welfare Act, which add up to more than R$ 1 trillion ($264.3 billion).

“This can only be done with legal permission, mainly via Congress-approved bills, and that's what we did in the first half of the year and will continue to do,” the Chief of Staff said, reiterating that the government is “taking a set of measures to correct imbalances, reduce spending, and improve the government's cost efficiency.”

Mercadante denied that Minister Levy has come out against increasing taxes, and said the economics staff is of one mind about the need to carry on with efforts to cut spending, improve management and the public spending efficiencies, and streamline the government while also increasing revenue. “We've got to act on both sides and we're all in agreement,” he said.

Finally, he said the scale of the istrative reform will be announced by Rousseff later this month. “The president will cut down ministries and personally and politically assigned roles. But the top cost driver in the government is Social Security, ing for 55% of government spending, the Organic Law on Social Assistance, and payroll which s for 20%—that's where we must focus our efforts towards a solid fiscal situation.”

Translated by Mayra Borges