Globo is already questioning the fiscal deficit promoted by Temer.

247 - The Globo media group, which was one of the main forces behind Michel Temer's provisional rise to power, is already showing impatience with the fiscal excesses he has been promoting in an attempt to remain in power. In an editorial, O Globo demands reforms and condemns the unrestrained spending:

Without reforms, signs of improvement will not persist.

It's always dangerous to apply simple common-sense principles to complex issues. One of them is that "what falls must rise." Not always, especially when it comes to the economic environment.

The economist and minister Mário Henrique Simonsen used to say that in economics there is no bottom to the well, because, under certain circumstances, the well goes down with the crisis. Depending on the crisis, the well also deepens.

A prime example is Venezuela, where the delusional Bolivarian project of "21st Century Socialism" has so disorganized the country that, despite having one of the world's largest oil reserves, it is floundering in a humanitarian crisis of Haitian proportions.

It cannot be guaranteed, therefore, that after two years of historic recessions, with annual GDP declines exceeding 3%, Brazil is destined to recover firmly from the end of this year/beginning of 2017.

Positive signs exist—those that would signal reaching "rock bottom." As has happened several times before, the Brazilian economy reacts quickly through the external sector after large currency devaluations. This adjustment is impressive, also aided by a negative factor: the recession and its effect on cutting imports. The positive trade balance in the first half of the year, of US$23,6 billion, is a record, for example. This confirms that, on the external front, there is nothing to fear.

But this is not a crisis in the classic Brazilian style. It didn't erupt because the economy exhausted its capacity to pay external commitments. On the contrary, there are more than US$300 billion in reserves. Lula and Dilma's Brazil went bankrupt in its own currency, due to the president's irresponsible fiscal management, which led to her impeachment.

If in the past the government needed to become solvent in dollars, today it needs to do the same with regard to the real, its internal debt, which is rapidly approaching 80% of GDP. For the Brazilian economy, this is one of the last stages towards insolvency in terms of internal debt.

This turbulence cannot be resolved by traveling to Washington, New York, or London. This time, the solution lies with the Brazilians themselves: the Executive and Legislative branches. Today, more so with the latter.

Estimates made by analysis departments of financial institutions are already pointing to a change in direction. The Central Bank's Focus Report, updated weekly based on these projections, has been forecasting some GDP growth in 2017.

But positive expectations alone are not enough. In other words, Michel Temer's interim government must submit to Congress the reforms without which Brazil will remain mired in this quagmire: pension reform, budget reform, and labor law reform. To begin with.

It is understood that Michel Temer's government is walking on thin ice, because it still needs Dilma's impeachment to be finally approved, which is expected by the end of August.

But further compromising fiscal balance — as with the gravy train of public sector salary increases — is like burning the bridge before crossing. The problem is reflected in the fiscal target figures. The R$139 billion for 2017 is still very high. There are several aspects of the current economic situation that point to recovery. However, without reforms, we will return to the time of "chicken flights" (short-lived booms).