News Daily Spot: Barbosa replaces Levy at the helm of Brazilian economic policy

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Barbosa replaces Levy at the helm of Brazilian economic policy

The buzz sounded for months, but Friday Joaquim Levy, precursor of cuts and tax adjustments that Brazil has been carrying out in recent months of crisis, officially announced leaving his post as finance minister. 

President Dilma Rousseff considered necessary it fits a profile of liberal government should reduce its intervention in lean times and appointed him leader of the new economic policies even before, but the differences between them were swift and reached the limit when the president did not accept the budget surplus target proposed by Levy of 0.7%, and preferred to reduce it to 0.5% to secure some benefits that the cuts could to threat.

The economic crisis is hitting Brazil since early 2014, but it becomes increasingly harder. The accumulated inflation of more than 10% consumers drowning as the recession deepens along was 1.6% in the third quarter of 2015, higher than the expected figure. 

Analysts also expect a contraction for 2016, which could scare off even more workers. Although unemployment is still at an alarming level, almost a million jobs have been lost in 2015 year is unequivocal sign that things may get worse. 

Levy's successor will be Nelson Barbosa, who captured this Friday to ensure that guarantee fiscal adjustments to avoid destabilizing the markets, although São Paulo Stock Exchange fell 2.14% and the real was devalued further against the dollar, sold close to four real. 

Barbosa, who already was Executive Secretary of the Ministry of Finance between 2011 and 2013, was until now Minister of Planning, Budget and Management portfolio that works closely with the Treasury. 

His position will be taken over Valdir Simão, until now minister of the General Controllership (CGU). Both will take office next monday .In press conference, he said Barbosa defend implementing a government goal of cats that can not be reversed in Congress and said he agreed with reduced fiscal surplus target recently set 0.5% of GDP. "At that time, it is not recommended to cut costs because the economy is shrinking," he said showing a different line of his predecessor. "

I do not defend you spend more, on the contrary, defend the policy of retrenchment, but the intensity at this time has to be dosed to not go deeper into recession," he added. 

Levy management, liberal Chicago School, marked by cuts in education, health and labor rights, wore much Rousseff ahead of the base of the PT and the unions, who, when they took to the streets to defend the president against those calling for the 'impeachment' messages have also launched against the new economic policy. 

More leftist tradition and postdoctoral economics at the New School for Social Research in New York, Barbosa's mission is to find the balance between management follow an austere and not abusing the masses. 

Former minister and blamed political instability in much of Brazilian economic problems. While most corrupt plot of the history of the country in which they are involved Petrobras executives of large construction and high políicos positions as ministers or even former House Speaker Eduardo Cunha, the opposition attempts to overthrow the president is investigating a process 'impeachment' based on the tax irregularities in 2014 to balance budgets. 

The fluctuations in the coalition government of ten games, especially in the PMDB, the main ally and divided between supporters and opponents of Rousseff party, have distanced the interests of the executive and the legislature and have impeded the adoption of some of the adjustment measures proposed Levy. "Much of the decline in GDP comes from political processes that had a strong impact on the economy, creating uncertainty," Levy said. "It would be an injustice to me, with my team and with President Dilma Rousseff believe that the country is facing a recession because you have proposed and to some extent already implemented a fiscal adjustment in which she insisted," the 54 reputed economist.

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