Luiz Inacio Lula da Silva proposed before the second round of the Brazilian elections, a broad program of renegotiation of consumer debtswho have fallen behind in their payments due to the impact of inflation and work stoppages in recent years due to the pandemic.
The “silver plan“to reactivate consumption through the refinancing of payments and the activation of new lines of credit, it would be backed by government bonds, and would be aimed at relieving low-income families. In Brazil, they estimate that nearly 70 million Brazilians have been blacklisted by credit rating agencies after the pandemic and rising inflation hit family budgets, hurting the economic recovery.
The Economist Guilherme Mellowhich advises Lula’s Workers’ Party, told Reuters the government would partially guarantee renegotiations of up to 95 billion reais ($18.2 billion) of non-bank debt, such as electricity, water, retail and telephone bills, to consumers with incomes of up to 3,600 reais ($677) per month.
The first step of the program called “Unroll Brazil“, would be to build credit bureaus that centralize data on consumer debts to coordinate creditor discounts. Renegotiated debts would be partially covered by a fund of government guarantee from 7 billion to 16 billion reais, Mello said.
“These are very reasonable amounts for the government to contribute,” he added. “You can have a design based on the tax credits that banks have, there are several possibilities to design this background”. The details of the plan, described in Lula’s presidential platform, became known after Jair Bolsonaro announced a debt renegotiation program for some 4 million clients of the state bank Caixa Econômica Federal.
by RN
