The Brazilian government’s attempts to reduce the country’s rapidly expanding debt by raising taxes and to stem a decline in the currency by using futures contracts are “stupid” and will only do the opposite, opposition Senator José Serra told Valor Econômico newspaper in an interview published on Monday.
Serra, the runner-up in the 2002 and 2010 presidential elections, said the deficit-reduction targets and an active monetary policy had caused a slump in economic activity across the board, Valor said. A “power vacuum” in the presidency is creating market turmoil, he added.
His remarks come as opposition to President Dilma Rousseff’s austerity program mounts, partly because she promised in her 2014 re-election campaign not to implement any budget cuts or interest-rate increases. Her austerity efforts, meant to keep Brazil’s sovereign investment-grade credit rating, have turned off even some supporters and are meeting resistance from lawmakers.