Why the exit of Brazil’s Treasury Secretary is so important

Jair Bolsonaro’s economic team was one of the main arguments for business elites to support the former army captain in the 2018 election, despite the lead candidate’s extremism and anti-libertarian past. But next month, the group once dubbed the “dream team” will lose one of its brightest stars, Treasury Secretary Mansueto Almeida — who announced his departure from the government on Sunday. In a crucial moment for the economy, the secretary said he is sure his pro-austerity platform will be carried on by his successor.

Initially named to head the Treasury Department by former President Michel Temer back in 2016, Mr. Almeida was the leading voice behind the move to adjust Brazil’s public accounts. Since 2014, the government has been piling primary deficits and increasing its public debt, a situation that Mr. Almeida believed had gotten out of control.

However, the coronavirus pandemic has crushed the economic team’s push for austerity. There is no room for bean-counting when tens of thousands of citizens are dying and several economic sectors require emergency assistance. This scenario has led Mr. Almeida to hand in his resignation.

“There is a positive facet to changing the Treasury Secretary. People will notice that nothing is going to change,” said Mr. Almeida, in an interview with finance website Brazil Journal on Sunday. “This is important from an institutional point of view because an institution’s work cannot depend on who the placeholder is.”

His replacement is likely to be economist Bruno Funchal, who has a similar view on austerity, but not the same clout. While the outgoing secretary has tried to downplay...