'Impeachment Could Help to Resolve Crisis,' Says Former Central Bank Chief Fraga

11/17/2015 - 10h51

With or without Joaquim Levy at the Ministry of Finance, Brazil is heading for "profound chaos," according to the ex-president of the Central Bank, Armínio Fraga.

Fraga believes that the Workers' Party (PT) has blown its chance to resolve the situation, and impeachment of President Dilma Rousseff may lead to solution of the crisis.

All Fraga's short-term predictions are gloomy: unemployment will increase, and inflation is at risk of being aggravated by the strength of the dollar, which may continue to rise.

In a two-hour interview, Fraga mentioned the word "problems" twelve times; examples of which he believes are excessive size of the state and low productivity. He also mentioned "reforms" twelve times - he believes that reform is the only sustainable solution.

A key member of Aécio Neves' policymaking team during his election campaign in 2014, Fraga is clear about the need for political change.

"It's time. The PT has put us in this mess, it's unforgivable," he said, and called for "new leadership." "I would like the PSDB to take charge, but it could be anyone else," he added.

"We have to provide a more transparent, liberal and much more progressive alternative. This is a worthy political battle," he argued.

Fraga did not mention President Rousseff's name, preferring "her", "his [Levy's] boss", "the one he works for" and "the President".

Nonetheless, he still believes there might be the potential for reform during Rousseff's mandate. "We could get to a point where fear takes over, and if there is any political dignity and a diagnosis, the process could start."

A "good sign", for Fraga, is the discussion of the proposals that will be held at the PMDB congress on Tuesday (17). Fraga mentioned the PMDB three times during the interview, once more than the PSDB.

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Folha: Have we hit rock bottom?
Armínio Fraga: No, I don't think so. I'm not saying that it's a bottomless pit, but for us to stabilize ourselves, there's still a lot of work to do.

Is there a solution that doesn't entail the end of the political crisis?
No.

So how can we end the political crisis?
The current situation is chaotic. There are several possibilities. Does the President stay in power? Does she go? Is there a more political solution? The Higher Electoral Court (TSE)? It's difficult to say. But at some point, we're going to need some group that has the cohesion to find a solution. The recent change in position by the PMDB, with the proposal [the document "Bridge to the Future", launched in October], was a significant step.

Is impeachment a solution?
Perhaps. Anything that happens according to the rule of law is legitimate. It is important that it be done this way, so nobody can say that it is a coup. And that's what's happening. If the facts in general lead our democratically elected Congress and our Higher Electoral Court to take this decision, then so be it. It might eventually contribute to a solution. But it's not something that I can say I want. It might happen because we are an open, democratic state, our institutions will function, and if it happens like that then so be it. Yes, it might lead to something, for sure.

Translated by TOM GATEHOUSE

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	Mauro Pimentel/Folhapress
	Brazil is heading for "profound chaos," according to the ex-president of the Central Bank, Armínio Fraga