WEBVTT - Teneo's Marconini: Brazil's Temer Is Best for Situation (Audio)

0:00:00.800 --> 0:00:03.840
<v Speaker 1>You're listening to Taking Stock with Kathleen Hayes and Pimp

0:00:03.880 --> 0:00:08.720
<v Speaker 1>Box on Bloomberg Radiomsef second president to be impeached in

0:00:08.760 --> 0:00:12.240
<v Speaker 1>Brazil's thirty one year old democracy. Will this lead to

0:00:12.440 --> 0:00:16.240
<v Speaker 1>a shift in policy? Brazilian stocks down today, led by

0:00:16.280 --> 0:00:19.560
<v Speaker 1>a drop in commodities companies. Investors are turning their attention.

0:00:19.880 --> 0:00:22.720
<v Speaker 1>They want to see concrete signs that the economy is

0:00:22.760 --> 0:00:27.440
<v Speaker 1>going to be improving. After Miss Russef leaves office and

0:00:27.760 --> 0:00:32.200
<v Speaker 1>Michael Tamar, her former vice president, takes over, Mario Marcarini

0:00:32.280 --> 0:00:36.080
<v Speaker 1>joins us. Now he's managing director for to New Intelligence

0:00:36.120 --> 0:00:39.480
<v Speaker 1>in Latin America. In fact, he's in Sampaolo, Brazil. Mario,

0:00:39.560 --> 0:00:42.800
<v Speaker 1>welcome to the show. Thank you so Mario. First of all,

0:00:42.840 --> 0:00:44.800
<v Speaker 1>what is the mood? What is their action among people

0:00:44.840 --> 0:00:48.240
<v Speaker 1>you talked to? Well, I think the first reaction is

0:00:48.560 --> 0:00:52.640
<v Speaker 1>is relief, you know, because people are kind of set

0:00:52.720 --> 0:00:54.440
<v Speaker 1>up with the whole process. I mean, this has been

0:00:54.600 --> 0:00:58.160
<v Speaker 1>nine months of a process since I got started, of course,

0:00:58.160 --> 0:01:02.560
<v Speaker 1>since it was authorized the Speaker of the House back

0:01:02.600 --> 0:01:05.480
<v Speaker 1>in December last year, so this is a long time

0:01:05.520 --> 0:01:07.679
<v Speaker 1>for this. They went through the House, went through the Senate.

0:01:07.959 --> 0:01:09.559
<v Speaker 1>He finally got to the end of it. So that's

0:01:09.600 --> 0:01:12.240
<v Speaker 1>the first thing, is his relief and the hope that

0:01:12.280 --> 0:01:14.720
<v Speaker 1>you can just begin to govern, you know, because since

0:01:14.760 --> 0:01:17.600
<v Speaker 1>the second Mandate, which started in two thousand and fifteen,

0:01:18.240 --> 0:01:21.160
<v Speaker 1>we have not had much of a government. So it's

0:01:21.160 --> 0:01:23.480
<v Speaker 1>just showed to me. It's so ironic because Brazil was

0:01:23.520 --> 0:01:28.560
<v Speaker 1>flying high, you know, andso left, and then Da Silva

0:01:28.600 --> 0:01:31.840
<v Speaker 1>took over, and the scene with with with certainly Carlos,

0:01:31.880 --> 0:01:34.600
<v Speaker 1>so that the foundation was there for growth and low

0:01:34.640 --> 0:01:37.880
<v Speaker 1>inflation and investment, the leta Silva carry things on. And

0:01:38.120 --> 0:01:41.039
<v Speaker 1>what happened with rece was it her fault? Was it

0:01:41.120 --> 0:01:44.320
<v Speaker 1>her lack of good policy or things just turn enough

0:01:44.360 --> 0:01:47.560
<v Speaker 1>that she was the one who got caught with the

0:01:47.600 --> 0:01:51.120
<v Speaker 1>wrong chair or no chair when the music stopped. Yeah,

0:01:51.520 --> 0:01:55.080
<v Speaker 1>I think I think unfortunately, I think it was utter incompetence.

0:01:55.200 --> 0:01:59.800
<v Speaker 1>I mean, I think Lula, when he chose the successor,

0:01:59.920 --> 0:02:02.360
<v Speaker 1>he could never have imagined that she could make such

0:02:02.400 --> 0:02:05.760
<v Speaker 1>a mess out of the economy, and that she could

0:02:05.800 --> 0:02:08.560
<v Speaker 1>be such a disaster politically as well, because you didn't

0:02:08.560 --> 0:02:11.760
<v Speaker 1>speak to anybody, she didn't talk to Congress. You made

0:02:11.880 --> 0:02:15.800
<v Speaker 1>enemies all over the place, including her own government, and

0:02:15.880 --> 0:02:18.480
<v Speaker 1>so it was. It was really difficult, and frankly, I

0:02:18.480 --> 0:02:21.280
<v Speaker 1>think the order of things is that I think Lula

0:02:21.360 --> 0:02:24.720
<v Speaker 1>did pretty well in the first mandate. The second half

0:02:24.720 --> 0:02:27.639
<v Speaker 1>of him his mandate, you have the global financial crisis,

0:02:28.240 --> 0:02:32.240
<v Speaker 1>and then they began, you know, with Kanjian policies, you know,

0:02:32.320 --> 0:02:36.680
<v Speaker 1>growth policies to make sure that Brazil would would stay

0:02:36.720 --> 0:02:40.240
<v Speaker 1>on course, and that worked. The economists even picked it up.

0:02:40.480 --> 0:02:42.920
<v Speaker 1>But the fact is that when she came in in

0:02:42.960 --> 0:02:46.160
<v Speaker 1>two thousand and ten, she basically thought that was that

0:02:46.280 --> 0:02:49.360
<v Speaker 1>was forever. You're just supposed to be spending money without

0:02:49.360 --> 0:02:52.840
<v Speaker 1>any limits, and that was completely wrong. Obviously, you know,

0:02:52.880 --> 0:02:55.400
<v Speaker 1>you cannot even do social policy just by dishing out

0:02:55.400 --> 0:02:58.280
<v Speaker 1>of money without having it, and so this is really

0:02:58.280 --> 0:03:00.880
<v Speaker 1>the main mistake. It was just just and that's the

0:03:00.880 --> 0:03:04.040
<v Speaker 1>beginning of it. Not to mention all the charges that

0:03:04.160 --> 0:03:07.239
<v Speaker 1>were real, that were constitutional. You know the constitution that

0:03:07.360 --> 0:03:11.120
<v Speaker 1>does talk about the responsibility for all the fiscal accounts

0:03:11.120 --> 0:03:13.680
<v Speaker 1>on the part of the president, and it was all

0:03:13.800 --> 0:03:17.720
<v Speaker 1>very clear, very institutional, very legal. But but that was

0:03:17.760 --> 0:03:19.360
<v Speaker 1>the beginning of it. I think, Yeah, I think it

0:03:19.440 --> 0:03:21.560
<v Speaker 1>was a shame and for a lot of people, I

0:03:21.560 --> 0:03:23.520
<v Speaker 1>think it would have been natural for you to have

0:03:24.480 --> 0:03:28.120
<v Speaker 1>the institutions, the the you know, the privatization or whatever

0:03:28.200 --> 0:03:30.080
<v Speaker 1>you had with Cardoza, then you had Lulo with the

0:03:30.160 --> 0:03:35.000
<v Speaker 1>social inclusion, but understanding what macro economics was about. So

0:03:35.040 --> 0:03:36.800
<v Speaker 1>what it was really a shame is how how the

0:03:36.840 --> 0:03:39.840
<v Speaker 1>whole thing derailed was all of a sudden she forgot

0:03:39.920 --> 0:03:42.680
<v Speaker 1>what macro economics was or didn't understand any of it

0:03:43.240 --> 0:03:46.760
<v Speaker 1>and through the country under the bus. Basically that's what happened. Well, okay,

0:03:46.840 --> 0:03:50.080
<v Speaker 1>so there were some would say these allegations of breaking

0:03:50.080 --> 0:03:53.320
<v Speaker 1>budget laws. Other elected officials have kind of you know,

0:03:53.320 --> 0:03:56.000
<v Speaker 1>they've fudged, they've cheated a bit, but they weren't brought

0:03:56.280 --> 0:03:58.320
<v Speaker 1>to impeachment by it. But as you say, people didn't

0:03:58.320 --> 0:04:00.160
<v Speaker 1>like her and she was mismanaging the can of me.

0:04:00.240 --> 0:04:03.160
<v Speaker 1>It's understandable how this could be used against her now.

0:04:04.280 --> 0:04:07.920
<v Speaker 1>Michael Tamer, the vice president who's now president are Bloomberg

0:04:08.200 --> 0:04:12.280
<v Speaker 1>story written from from some follow from Brazilia, says a

0:04:12.280 --> 0:04:14.360
<v Speaker 1>lot of people view him as part of the same

0:04:14.520 --> 0:04:17.640
<v Speaker 1>political establishment they have come to distrust. Is he the

0:04:17.720 --> 0:04:20.120
<v Speaker 1>right guy or is it going to take yet another

0:04:20.200 --> 0:04:23.440
<v Speaker 1>president to get Brazil back on track? No, I think

0:04:23.480 --> 0:04:26.320
<v Speaker 1>I think to get back on track he's been. I

0:04:26.440 --> 0:04:30.160
<v Speaker 1>must say, I find that he is, uh, you know,

0:04:30.480 --> 0:04:33.919
<v Speaker 1>the best you could get for for the current situation,

0:04:34.000 --> 0:04:37.400
<v Speaker 1>considering all the ramifications and who happened to be at

0:04:37.440 --> 0:04:40.760
<v Speaker 1>the vice presidency. The fact is he was never you know,

0:04:40.800 --> 0:04:44.440
<v Speaker 1>a major part of Delmon's government. She didn't consult him,

0:04:44.480 --> 0:04:47.320
<v Speaker 1>He was not really involved in any policy making. And

0:04:47.360 --> 0:04:49.720
<v Speaker 1>the fact is, since he has come in when she

0:04:49.839 --> 0:04:52.159
<v Speaker 1>was suspended, you know, once uh, he got to that

0:04:52.200 --> 0:04:55.919
<v Speaker 1>point in the impeachment process, he already came in with

0:04:55.960 --> 0:04:59.000
<v Speaker 1>a total different view. Basically, you know, he wants to privatize,

0:04:59.000 --> 0:05:04.040
<v Speaker 1>he wants to to to deal with the fiscal disarrangement

0:05:04.120 --> 0:05:06.720
<v Speaker 1>that we have. He has been doing so. He has

0:05:06.760 --> 0:05:11.480
<v Speaker 1>the right finance minister, he has the right Central Bank president.

0:05:12.000 --> 0:05:14.839
<v Speaker 1>And I think markets are still very optimistic, and I

0:05:14.839 --> 0:05:17.039
<v Speaker 1>think they should be that at least we have the

0:05:17.080 --> 0:05:20.200
<v Speaker 1>instruments with which to do what is necessary. I think

0:05:20.200 --> 0:05:23.200
<v Speaker 1>the risk and the signpost you have to watch, of course,

0:05:23.279 --> 0:05:24.920
<v Speaker 1>is going to be Congress, because a lot of the

0:05:24.960 --> 0:05:28.440
<v Speaker 1>stuff you need to do, starting with a spending cap,

0:05:28.800 --> 0:05:31.279
<v Speaker 1>which is something that he's been announcing since the beginning.

0:05:31.320 --> 0:05:33.520
<v Speaker 1>There's a lot of support for it for those who

0:05:33.560 --> 0:05:35.919
<v Speaker 1>understand economics and who can see what is needed for

0:05:35.960 --> 0:05:39.320
<v Speaker 1>the country. Uh, that has to go through Congress. So

0:05:39.360 --> 0:05:41.440
<v Speaker 1>that's what we need to watch between now in October,

0:05:41.520 --> 0:05:45.280
<v Speaker 1>we're going to have the campaign and then the municipal elections,

0:05:45.400 --> 0:05:48.880
<v Speaker 1>so it's kind of difficult to to vote, but I think,

0:05:48.960 --> 0:05:51.080
<v Speaker 1>you know, until the end of the year, I think

0:05:51.080 --> 0:05:53.760
<v Speaker 1>he will be able to vote on a spending cap,

0:05:53.839 --> 0:05:56.440
<v Speaker 1>which is which is going to be unbelievable actually as

0:05:56.480 --> 0:06:01.720
<v Speaker 1>a signal of commitment with fiscal response, fability Marco Marcot Needi,

0:06:01.760 --> 0:06:05.080
<v Speaker 1>thank you so very much. Fiscal responsibility what Brazil needs

0:06:05.160 --> 0:06:10.040
<v Speaker 1>now joining us from latam uh in a tornado intelligence

0:06:10.120 --> 0:06:10.960
<v Speaker 1>This is Bloomberg