By Brazil Stock Guide – Brazilian President Luiz Inácio Lula da Silva is considering naming Vice President Geraldo Alckmin as finance minister if he wins re-election, a move aimed at reinforcing fiscal credibility and appealing to centrist voters after Senator Flávio Bolsonaro outperformed expectations in the first round, Reuters reported.
Under the proposal, which remains under discussion, Alckmin would retain the vice presidency while taking over the Finance Ministry next year, giving him greater authority over economic policy, according to two people familiar with the deliberations cited by Reuters. The presidency did not respond to the news agency’s request for comment.
The potential appointment would represent a major signal to investors and moderate voters ahead of the runoff. Alckmin is regarded as one of the more centrist figures in Lula’s administration and has longstanding ties with the business community.
He previously served two terms as governor of São Paulo and challenged Lula for the presidency in 2006. Until earlier this year, Alckmin also headed the Development, Industry and Trade Ministry and became a key Brazilian interlocutor with Washington after the US imposed broad tariffs on Brazilian goods.
Fiscal credibility moves to center of campaign
Lula had already considered appointing Alckmin to the Finance Ministry after the 2022 election before ultimately choosing Fernando Haddad, a member of the Workers’ Party.
The issue has returned to the center of the campaign after Lula finished behind Flávio Bolsonaro in Sunday’s first round, an outcome that contradicted polls that had generally indicated a narrow advantage for the incumbent.
The result, combined with gains by Bolsonaro-aligned candidates in Congress, triggered a market rally on Monday as investors anticipated that a Bolsonaro government could pursue faster fiscal consolidation with stronger legislative backing, Reuters reported.
Brazil’s gross public debt has increased by more than 10 percentage points of GDP since Lula took office, reaching 82.9% of GDP. The deterioration in public finances has remained a key vulnerability for the government even as inflation stayed below historical averages, economic growth exceeded expectations, unemployment hit record lows and real wages increased.
Lula highlighted Alckmin’s fiscal credentials after the first-round results.
“No one in this country has the moral authority to lecture me or Alckmin on fiscal policy or fiscal responsibility, given what he did in Sao Paulo state and what we did in Brazil,” Lula said, according to Reuters.
People familiar with the discussions said strengthening Alckmin’s role could help Lula reach voters concerned about fiscal discipline who are reluctant to support Bolsonaro but have also become dissatisfied with what they view as a more populist direction in the current administration.
Lula also considers campaign shake-up
The possible change in economic command comes as Lula considers restructuring his political marketing operation for the runoff.
According to Metrópoles, Lula has sent intermediaries to approach political strategist João Santana about joining the campaign after losing the first round to Flávio Bolsonaro by less than two percentage points.
A group within the government and campaign is advocating for Santana to replace current strategist Raul Rabello, a business partner of Communications Minister Sidônio Palmeira, according to the report.
Santana previously ran Lula’s successful 2006 presidential campaign as well as Dilma Rousseff’s winning campaigns in 2010 and 2014. He was later arrested during the Lava Jato investigation and entered into a plea bargain.
The discussions over both Alckmin and Santana show Lula’s campaign reassessing its approach after a first-round result that increased the importance of centrist voters, fiscal policy and the government’s political communication ahead of the runoff.
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