Dilma Rousseff government is committed towards making the fiscal adjustment he proposes be taken forward to ensure the realization of the so-called primary surplus that does not represent nothing less than the payment guarantee by the federal government's of debt service public that benefits mainly the financial system, particularly banks. To achieve this goal, the Brazilian government presented the proposal to cut more than R$ 70 billion in its spending, including social programs. An economy of this magnitude will aggravate the recession that hit Brazil at the time and that will lead to GDP decline of 1.2% in 2016. The proposal of Dilma Rousseff government contains an "evil package" against the workers and the Brazilian people in general by restricting the granting of unemployment insurance, the salary bonus and pension for death and disease and a "goodness package" for the benefit of the financial sector with the guarantee of payment of the public debt and of the employer sector in general with exemptions.

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THE DILMA ROUSSEFF GOVERNMENT AND BANKS UNITED AGAINST
BRAZILIAN PEOPLE
Fernando Alcoforado *
The minister of Brazilian Economy, Joaquim Levy, is working well in order to make the
fiscal adjustment proposed for him to be carried forward to ensure the realization of the
so-called primary surplus that represent nothing less than the federal government's
payment guarantee of service public debt that benefits mainly the financial system,
particularly banks. The emphasis of Mr. Levy to ensure the primary surplus denounces
whom he intends to benefit: the financial system, the main creditor of the Brazilian
internal public debt. To meet the interests of the financial system, Joaquim Levy had the
good pleasure of weakened and cowardly President Dilma Rousseff that submitted the
impositions of her finance minister.
To achieve this goal, Levy has proposed cutting more than R$ 70 billion in government
spending, including social programs. An economy of this magnitude could potentially
worsen the recession that hit Brazil at the time and that will lead to GDP (Gross
Domestic Product) down 1.2% in 2016, according to the Focus report of the Central
Bank. In addition to this cut in government spending, the fiscal adjustment measures
proposed by the Minister Levy include restrictions of the granting of unemployment
insurance and salary bonuses which would generate an economy of R$ 16 billion and
the granting of pension for death and help-disease that would generate an economy of
R$ 2 billion, the review of the exemption program payrolls that would generate savings
of R$ 5.4 billion and increased taxes order of R$ 19.6 billion.
The proposal of the Minister Levy has therefore an "evil package" against the workers
and the Brazilian people in general to limit the granting of unemployment insurance, the
salary bonus, pension for death and help-disease and a "package goodness" for the
benefit of the financial sector with the guarantee of payment of the public debt and of
the employer sector in general with exemptions. The new legislation proposed in the
MP (Provisional Measure) 664 of the federal government to institute a grace period for
the death pension, providing a minimum of 24 monthly contributions, made an
unquestionable attack against workers' interests. The text of the MP 665 of the federal
government changes the existing rules and difficult access to employment benefits such
as unemployment insurance and the salary bonus. The “evils package” of Dilma
Rousseff government contained in the fiscal adjustment designed by Mr. Levy,
authentic representative of bankers, has added to the outsourcing proposal coming from
the House of Representatives which also undermines workers.
The MPs 664 and 665 from the federal government to change the criteria for the
granting of access to social security and labor benefits have changed in House of
Representatives that oppose interests of Dilma Rousseff government. The set of
measures of fiscal adjustment sent by the Dilma Rousseff government to House of
Representatives is, so far, the main effort of her economic team. This set of measures is
questionable, however, because, rather than penalizing the workers and the Brazilian
people in general, the fiscal adjustment of Dilma Rousseff governments could get more
significant results if are taxed the great fortunes, increased the tax on financial
institutions and dramatically reduce the cost of governmental expenses and charges of
the federal government with the payment of public debt that corresponded in 2014 to
45.11% of the Brazilian government budget, as well as propose a national development

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project. This is what would be the fiscal adjustment that would meet with effectiveness
the needs of the Brazilian nation at the time.
It is unacceptable that the Brazilian government has allocated 45.11% of the 2014
Brazilian government budget for the payment of public debt when there is the urgent
need for public funds in the amount of R$ 2.5 trillion to invest in precarious economic
infrastructure (energy, transport and communications) and social (education, health,
sanitation and housing). The pity is that the federal government allocated 45.11% of the
budget for the payment of public debt largely surpassing the resources for education
(3.75%), health (3.98%), national defense (1.58%) and public security (0.33%), among
others. States and municipalities, almost all failed, receive transfer of the Union (federal
government) only 9.19%. In other words, the lion's share in the budget of the Republic
is for the payment of public debt, whose main beneficiary is the financial system. This
is the reason why the Brazilian government on all levels (federal, state and municipal)
does not have the resources to meet their most basic needs.
If there is no reversal of this plan, it shall be marked with the passage of time the
imbalance between demand and availability of resources to meet the needs of Brazil in
economic and social infrastructure to the detriment of the population and the national
productive sector. For the Brazilian government have the resources for investment in
economic and social infrastructure, it´s necessary to renegotiate with domestic and
foreign banks (55% of creditors of public debt), investment funds (21% of creditors of
public debt), pension funds (16% of creditors of public debt) and non-financial
companies (8% of creditors of public debt) reduction in spending on the payment of
debt service lengthening the payment of interest and amortization of public debt.
In addition to going to have the resources for investment in precarious economic and
social infrastructure of Brazil, the policy of reducing and lengthening the payment of
interest and amortization of public debt would also have the objective of reversing the
explosion tendency of public debt from Brazil that reached R$ 62 billion during the
Cardoso government, R$ 687 billion during the Lula government and has already
reached R$ 2.4 trillion in 2014 during the Dilma Roussef government. Maintained this
trend will be diminishing the resources available by the government (federal, state and
local) to invest in economic and social infrastructure. Besides the high expenditure on
the payment of the public debt, high Selic rates adopted by the Central Bank of the
federal government, the largest in the entire world economy, and the growing deficit of
public sector contribute decisively to the continued increase in public debt in Brazil.
The connivance of the federal government with the interests of the financial system,
which is making money than never in Brazil and the world, is that means that there is
continuous rising Selic interest rates. In turn, the budget deficit grows continuously in
Brazil because the Brazilian government increases its spending inefficiently that
overcome its revenues impacting negatively on the country's economic progress,
considering that reduces the investment capacity of businesses as well as own state. The
public deficit is equal to the portion of government spending, but that are not covered
by revenues (taxes), whose main consequence is the structural disorder of the economy
that is recorded at the time.
Using data from the Penn World Table (a reliable source of information compared to
national accounts), Brazil would have an excess of spending between 14% and 26%.
Taxes, in turn, correspond to 40% of GDP that are of the worlds largest. It should be
noted that when the Brazilian government incurs budget deficit, it seeks to cover it

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acquiring internal and external resources by issuing bonds to be purchased by the
private sector, especially the financial system. Even before the serious situation
experienced by Brazil's lack of resources for investment in economic and social
infrastructure and the possibility of explosion of public debt that undermines the
interests of the Brazilian people, the Brazilian government maintains irrationally its
economic and financial policies strongly welcomed to its creditors, ie the financial
system. The continuation of this policy will lead the Brazil certainly to economic
bankruptcy. The Brazilian people have to mobilize to prevent this scenario to
materialize in the future. Never the Brazilian government's ability to exercise control
over national finances was so weak in the history of Brazil.
*Fernando Alcoforado , member of the Bahia Academy of Education, engineer and doctor of Territorial
Planning and Regional Development from the University of Barcelona, a university professor and
consultant in strategic planning, business planning, regional planning and planning of energy systems, is
the author of Globalização (Editora Nobel, São Paulo, 1997), De Collor a FHC- O Brasil e a Nova
(Des)ordem Mundial (Editora Nobel, São Paulo, 1998), Um Projeto para o Brasil (Editora Nobel, São
Paulo, 2000), Os condicionantes do desenvolvimento do Estado da Bahia (Tese de doutorado.
Universidade de Barcelona, http://www.tesisenred.net/handle/10803/1944, 2003), Globalização e
Desenvolvimento (Editora Nobel, São Paulo, 2006), Bahia- Desenvolvimento do Século XVI ao Século XX
e Objetivos Estratégicos na Era Contemporânea (EGBA, Salvador, 2008), The Necessary Conditions of
the Economic and Social Development-The Case of the State of Bahia (VDM Verlag Dr. Muller
Aktiengesellschaft & Co. KG, Saarbrücken, Germany, 2010), Aquecimento Global e Catástrofe
Planetária (P&A Gráfica e Editora, Salvador, 2010), Amazônia Sustentável- Para o progresso do Brasil e
combate ao aquecimento global (Viena- Editora e Gráfica, Santa Cruz do Rio Pardo, São Paulo, 2011),
Os Fatores Condicionantes do Desenvolvimento Econômico e Social (Editora CRV, Curitiba, 2012) and
Energia no Mundo e no Brasil- Energia e Mudança Climática Catastrófica no Século XXI (Editora CRV,
Curitiba, 2015).