Good morning! Today, mass resignations in the Economy Ministry prove that the government’s “pro-market guarantor” image was a sham. Truckers’ strike fears increase after distributors stage walkout. Amid the storm, Bolsonaro’s approval falls once more.
The last of the pro-market guarantors
The government’s decision to ignore the federal spending cap led to the resignation of four top Economy Ministry officials: Treasury and Budget Secretary Bruno Funchal, National Treasury Secretary Jeferson Bittencourt, as well as their deputies.
Driving the news. Economy Minister Paulo Guedes — who was supposed to be the markets’ guarantor of the government’s pro-business agenda — has continuously lost power and caved to political pressures to jack up spending.
- Over time, Mr. Guedes faded into the background, making Mr. Funchal the de facto guarantor, the market’s last line of defense for fiscal responsibility. Now, he is gone.
Why it matters. Since the 2018 election, local investors have bought into the illusion that Mr. Bolsonaro would lead a cabinet of austerity hawks, filled with respected names from the financial world. That was never the case, and now the government is barely trying to keep up appearances.
- Ultimately, it comes down to the tug of war for control...