UPDATE 2-Brazil’s Mantega would leave in 2nd term, Rousseff says
By Alonso Soto and Luciana Otoni
BRASILIA, Sept 8 (Reuters) – Brazil’s President Dilma Rousseff said on Monday that Finance Minister Guido Mantega would not stay on if she is re-elected in October, reiterating her pledge to bring in a new cabinet in hopes of regaining the confidence of voters and investors.
In an interview with O Estado de S.Paulo that was broadcast live via webcast, Rousseff said Mantega told her he would step down at the end of December after eight years on the job, citing personal reasons.
Mantega has been in an unwanted spotlight since last week, when Rousseff answered a reporter’s question on the campaign trail about the finance minister’s future with the following response: “New government, new team.”
Many interpreted that off-the-cuff reply as an attempt by Rousseff to lay the blame for Brazil’s economic slump on her finance minister. With polls showing Rousseff poised to lose the election in a runoff against environmentalist Marina Silva, the president is trying to persuade voters that she’ll make changes to revive the economy if they give her a second chance.
Even though many investors would be glad to see Mantega step down, some analysts questioned whether a second Rousseff term without him would mean an end to what business leaders have criticized as her interventionist economic polices.
“Even if you change a few names I don’t think that Rousseff will change her economic ideals of state intervention and heavy public spending,” said Flavio Serrano, senior economist with Espirito Santo Investment Bank in Sao Paulo.
“At the end of the day she would continue to be the boss.”
In Monday’s interview, Rousseff said she also plans changes in economic policy such as removing some “incentives,” though she did not provide any specifics.
The president did not say who would replace Mantega. But a government official close to the discussions told Reuters that she is considering World Bank economist Otaviano Canuto and former Deputy Finance Minister Nelson Barbosa.
At the central bank, Rousseff is hoping for continuity and would likely ask Alexandre Tombini to stay on as the bank’s president, the official added on condition of anonymity.
Once praised for helping steer Brazil out of the 2008-2009 global financial crisis relatively unscathed, Mantega has repeatedly failed to bolster an economy stuck in a rut of weak growth and high inflation for the last four years.
Mantega, known for his loyalty to Rousseff, has been criticized by some of his own colleagues for his overly optimistic forecasts that they say has damaged the government’s credibility.
No stranger to criticism, Mantega has weathered the ups and downs of the post with a brave face, often saying that being optimistic about Brazil’s prospects is part of his job.
As Brazil’s economy started to take a turn for the worse in late 2012, the British magazine The Economist called for Mantega’s resignation in an editorial that some analysts and politicians believe ended up having the opposite effect.
Rousseff and the ruling Workers’ Party reacted angrily to the article, saying that they would not let a foreign interest dictate policy decisions to a sovereign nation. (Editing by Andrew Hay and Todd Benson)