Brazil appoints pro-market finance minister

Brazil appoints pro-market finance minister

Thursday, November 27, 2014 10:13 pm

Brazilian President Dilma Rousseff named pro-market bank executive Joaquim Levy to be her new finance minister Thursday as her government looks to steer the economy out of recession.

Levy, a University of Chicago-trained economist, is a popular choice in the financial world, where Rousseff’s management of the world’s seventh-largest economy has been widely attacked.

President Dilma Rousseff: appoints pro-market finance minister

President Dilma Rousseff: appoints pro-market finance minister

At a press conference where the president’s new economic team was announced — with central bank chief Alexandre Tombini keeping his job and economist Nelson Barbosa taking over the planning ministry — Levy vowed to whip the government’s books into shape by boosting the primary surplus.

“We’re going to work with a primary surplus target of 1.2 percent of GDP in 2015, while for 2016 and 2017 the (target) will be no less than two percent,” he said.

“This target is fundamental to reactivate growth.”

A primary surplus means the government is spending less than its overall revenue, excluding interest payments on its debt.

Brazil formerly hewed to a target of 3.1 percent of GDP, but that was slashed to 1.9 percent in 2013. As of September, the government had only saved 0.61 percent of GDP this year.

– Minister ‘Scissorhands’ –

Levy, 53, was previously chief executive officer of Bradesco Asset Management (Bram), part of Brazil’s second-largest private bank.

He has also worked with the International Monetary Fund and the European Central Bank.

Nicknamed “Scissorhands” for his steely budgetary management, he was described by Brazilian newspaper Folha de Sao Paulo as “addicted to work, frank almost to the point of rudeness” and “as stubborn as Dilma,” a former leftist guerrilla known for her toughness.

Levy takes over the finance ministry from Guido Mantega, in the post for eight years.

“He is a big name. He is an excellent name. I see him as austere, rigorous. This could enable us to send out a signal that the finance ministry is embarking on fiscal adjustments” to win back the confidence of the markets, TAG Investments economist Andre Leite told AFP.

Levy served as treasury secretary under Rousseff’s predecessor and mentor Luiz Inacio Lula da Silva, a former union leader who saw him as underscoring his own market credentials.

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