Rui Costa, the Brazilian government’s chief of staff, on Wednesday said the Lula administration is not considering a review of the pension reform, approved late in 2019 during Jair Bolsonaro’s first year in office.
“There is no proposal being analyzed or considered at this time for a review of reforms, whether the one on social security or others,” he told reporters at the presidential palace. With the aim of calming down markets, Mr. Costa addressed the local press after the swearing-in ceremony of Vice President Geraldo Alckmin as the new industry and trade minister.
Investors on Tuesday reacted poorly to Social Security Minister Carlos Lupi’s inaugural remarks. He denied Brazil’s social security deficit and called the 2019 revision of pension rules an “anti-reform,” pledging to “reassess” its provisions. Economists who are critical of the new administration didn’t pull any punches in their reaction to Mr. Lupi’s soundbites.
Alexandre Schwartsman, who served on the Central Bank’s board during Lula’s first term in office (2003-2006), called Mr. Lupi a “denialist.” The social security deficit reached BRL 361 billion (USD 66 billion) at the end of the 2021 fiscal year.
Chief of staff Costa added that President Lula would review any proposal the government is to submit before Congress and confirmed that the first full cabinet meeting would take place on Friday. During the 2022 campaign, Lula went back and forth on promises to “review” the pension and labor reforms, the latter approved in 2017.
Also on Wednesday, the soon-to-be-confirmed Petrobras chief executive officer, Jean Paul Prates, denied fears of direct government interference in the company’s pricing policy (which is pegged to international oil prices). Mr. Prates said Lula’s recent remarks about making gas cheaper do not mean a complete departure from international fluctuations.
He also denied that plans to increase the company’s refining capacity mean building new refineries.
Mr. Prates’s words were not an about-face on how to deal with Petrobras. Still, the company’s share prices shot back up after Messrs. Prates and Costa’s statements. By 4:15 pm, Brasília time, the company was trading up by almost 4 percent.
Petrobras has bled value since Lula won the election, with share prices posting sharp declines this week, as markets reacted to soundbites from new cabinet members.
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