According to Levy, adjustments are necessary because the world has changed.
Finance Minister Joaquim Levy said that the basis for what the government is doing in the economy is related to the political changes implemented by Brazil's main global partners; "President Dilma Rousseff says that the world has changed not as an excuse, but because we need to adapt: otherwise, it becomes impossible to continue with the counter-cyclical policy. First, because the accounts can't handle it; second, because our partners are in a different situation," he said.
Brazil Agency - Finance Minister Joaquim Levy said today (16), in a lecture for businessmen at the Commercial Association of São Paulo, that the basis of what the government is doing in the economy is related to the political changes carried out by Brazil's main world partners.
"President Dilma Rousseff says that the world has changed not as an excuse, but because we need to adapt: otherwise, it becomes impossible to continue with the counter-cyclical policy. First, because the accounts can't handle it; second, because our partners are in a different situation."
He added: "What we've seen in terms of falling commodity prices and rising exchange rates is a consequence of the end of countercyclical policies in those countries. Now we don't have much choice anymore. We have to adapt."
According to him, the good news is that, in Brazil, when adaptation to delicate moments is necessary, everyone collaborates, resulting in a rebalancing of accounts. He cited, as an example of collaboration from all sectors of society, the understanding that the fiscal adjustment will not increase taxes but rather reduce the tax exemption on certain items, a measure approved at a specific time with a specific objective.
"The measures adopted [now] are nothing more than adjusting [the economy] to a new situation and eliminating some things done during a period when countercyclical policy was being discussed. There was no presumption of persistence in these matters forever because they are unsustainable from a fiscal point of view," he said.
Levy emphasized that President Dilma Rousseff is absolutely calm and confident about the path to be followed. According to the Finance Minister, even if President Dilma has to consult the National Congress, she will adopt this course of action because she is aware that the country is democratic.
He added, however, that the government's contact with Congress will be based on persuasive work. "The goal of the measures is to bring tranquility to businesses, since the market has changed, and if we don't change, we will also have problems."
The minister noted that public spending remains high. He added that adjustments are needed to present the private sector with a confidence-inspiring scenario. "We want to avoid very unfavorable scenarios, because then it becomes very difficult to work. If we do it on the necessary scale, we will quickly have a scenario in which people can feel secure, start working with less uncertainty, and take risks," he said.
Levy also said that swift action is needed to create stability so that the country can return to growth. "We pay the cost, but we also reap the benefits. In addition to making adjustments, the government has activities that will encourage the resumption of concessions with greater involvement of private capital. We are working with various vectors to allow the economy to grow again on a solid foundation. Looking to a new stage will be increasingly important, but we can only move forward if the initial stage is complete," he said.