247 - Negotiations to resolve the crisis between the Planalto Palace and the National Congress regarding the legislative decree that blocked the increase in the IOF should be resumed next week, with direct coordination by President Luiz Inácio Lula da Silva (PT), Finance Minister Fernando Haddad (PT), and the presidents of the Senate, Davi Alcolumbre (União-AP), and the Chamber of Deputies, Hugo Motta (Republicanos-PB), reports Lauro Jardim, from the newspaper O Globo.
The government has even appealed to the Supreme Federal Court (STF) to try to reverse the legislative decision, but the expectation behind the scenes is that the political solution will prevail. According to sources involved in the negotiations, a negotiated solution, with or without the mediation of Minister Alexandre de Moraes, should involve a broader proposal — what interlocutors call a “global solution.”
What is at stake - The starting point of the crisis was the decision by Congress to suspend the increase in the IOF on international credit operations, a measure that the Lula government considered strategic to increase revenue. Given the rejection of the measure, the Planalto is seeking an alternative that will allow for offsetting losses without compromising fiscal balance.
The difficulty lies in the political impasse: on one side, members of parliament say they will no longer accept any form of tax increase; on the other, the Executive maintains that it has exhausted the possibilities for cutting expenses — and that the adjustment suggestions presented by Haddad have been systematically rejected by members of Congress.
A possible solution: cross-bargaining - Government leaders believe that the solution lies in tying the IOF issue to other agendas of interest to Congress, especially those that arouse less resistance in the plenary. One example that has been floated is the exchange of favors: Lula would agree not to veto the bill that increases the number of federal deputies from 513 to 531 — a proposal considered controversial, but with strong appeal among parliamentarians — and, in exchange, the Chamber of Deputies would approve a government bill that reevaluates and limits tax benefits currently granted.
This arrangement is part of what the articulators call a"global solution": it is not just about resolving the IOF imbroglio, but about building a package of agreements that resolve other pending issues between the Executive and Legislative branches.
Obstacle in the way: amnesty - However, there is a friction factor that threatens to stall the negotiation. Pro-Bolsonaro sectors of the opposition want to include in the package the amnesty project, which aims to benefit pro-Bolsonaro activists arrested as a result of the coup attacks of January 8, 2023. This proposal is considered unacceptable by the government and would hardly find consensus.
The opposition intends to vote on this project this month, which could generate a parallel crisis and contaminate conversations about the IOF.
Decisive meeting - The decisive meeting on the subject should take place starting next Tuesday (8), when both Lula (who will be back from the BRICS meeting in Rio de Janeiro) and Hugo Motta (who is returning from a trip to Lisbon) will be in Brasília again. Fernando Haddad and Davi Alcolumbre are also expected to be present, to try to work out an agreement.
