LIMA (Reuters) – Finance Minister Joaquim Levy told Reuters yesterday that he enjoys the total backing of Brazil’s beleaguered President Dilma Rousseff and intends to stay on the job as long as needed to put the books in order and pull the economy out of its slump.
Market speculation that Levy, an orthodox economist widely respected among investors, was considering quitting her administration has added fuel to a political and economic crisis that has driven down the Brazilian real currency and pushed up Brazilian interest rate futures.
“She has personally and explicitly manifested her support to me,” Levy said on the sidelines of the International Monetary Fund annual meetings in Peru. “I have her support. It’s not about feeling you are backed. I see it in her actions.”
The University of Chicago-trained economist said Rousseff is committed to pushing through austerity measures under fire by a restive Congress. He said Rousseff is wholly behind his policies and committed to reaching a primary budget surplus of 0.7 per cent of gross domestic product next year.
Rousseff, who was narrowly re-elected in October, picked the banking executive to lead an economic team tasked with undoing a series of policy missteps during her first term that helped plunge the economy into its worst recession in 25 years.
The ideological divide between Rousseff, once a Marxist who believed in armed struggle against capitalism, and Levy, a former IMF official, has sown doubts about their ability to agree on a plan to rescue an economy that not long ago was a Wall Street favourite.
Cheered by markets when he took over as finance minister in January, many investors now believe Levy’s influence in the administration is diminishing and he has failed to convince Rousseff that Brazil needs to adopt a more aggressive fiscal adjustment plan.
Levy has been criticized publicly by lawmakers from Rousseff’s own Workers’ Party who have called for his removal.
