Brazil Should Give Temer a Chance, Ex-Central Bank Chief Says

  • Vice president presented `quality plan' for economy: Fraga
  • Gavea partner says he doesn't plan to return to government

Former Brazil central bank chief Arminio Fraga, now a partner in an investment firm, expressed his support for Vice President Michel Temer’s economic proposals, while ruling out taking up a position in an eventual post-impeachment government cabinet.

“Vice President Temer presented a quality plan” for the economy, Fraga said Tuesday at an event in Sao Paulo. “I hope he has a chance to build a path based on it.”

Fraga, who founded Gavea Investimentos Ltda. in 2003 after leaving the central bank, said that while he would welcome the chance to offer suggestions and collaborate, now is “not the time” to return to the government, citing personal reasons. He said he would be happy to give Temer advice on economic policy and even suggest names for his cabinet.

QuickTake Brazil's Highs and Lows

The full lower house of Congress is expected to start voting as early as Friday whether to approve the impeachment of President Dilma Rousseff and send the motion to the Senate for consideration. If the Senate accepts the charges against Rousseff, she would have to step down until a final ruling is made. Temer would then take over as president.

Fraga has been critical of the Rousseff administration and has said she has little chance of running the country effectively even if she manages to survive the impeachment initiative.

“It is possible to stop this train without a driver going towards the abyss,” he said Tuesday. “If you stop it, it is good enough.”

Newspaper Folha de S.Paulo reported Tuesday that Temer was trying to get a meeting with Fraga and would like to appoint him to head Brazil’s finance ministry if he were to take office after a possible impeachment of Rousseff. Opposition candidate Aecio Neves, who was the runner-up to the 2014 presidential election, had promised he would make Fraga finance minister if he won.

Fraga, who said in an interview in February he saw no recovery for Brazil’s economy for the time being amid low investor confidence and political uncertainty, reiterated on Tuesday that the nation’s debt trajectory has to be dealt with.

“If impeachment comes accompanied by a clear proposal for the future of Brazil -- a clean break from what we have now -- the economy can indeed recover,” he said. “I don’t think it’s going to take a leap and begin to grow in an accelerated fashion because the problems are many and very difficult. Let’s not fool ourselves.”

Before it's here, it's on the Bloomberg Terminal.