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Teneo's Marconini: Brazil's Temer Is Best for Situation (Audio) · Bloomberg Intelligence

• 0:00
  Speaker 1: You're listening to Taking Stock with Kathleen Hayes and Pimp
• 0:03
  Speaker 1: Box on Bloomberg Radiomsef second president to be impeached in
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  Speaker 1: Brazil's thirty one year old democracy. Will this lead to
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  Speaker 1: a shift in policy? Brazilian stocks down today, led by
• 0:16
  Speaker 1: a drop in commodities companies. Investors are turning their attention.
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  Speaker 1: They want to see concrete signs that the economy is
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  Speaker 1: going to be improving. After Miss Russef leaves office and
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  Speaker 1: Michael Tamar, her former vice president, takes over, Mario Marcarini
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  Speaker 1: joins us. Now he's managing director for to New Intelligence
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  Speaker 1: in Latin America. In fact, he's in Sampaolo, Brazil. Mario,
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  Speaker 1: welcome to the show. Thank you so Mario. First of all,
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  Speaker 1: what is the mood? What is their action among people
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  Speaker 1: you talked to? Well, I think the first reaction is
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  Speaker 1: is relief, you know, because people are kind of set
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  Speaker 1: up with the whole process. I mean, this has been
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  Speaker 1: nine months of a process since I got started, of course,
• 0:58
  Speaker 1: since it was authorized the Speaker of the House back
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  Speaker 1: in December last year, so this is a long time
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  Speaker 1: for this. They went through the House, went through the Senate.
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  Speaker 1: He finally got to the end of it. So that's
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  Speaker 1: the first thing, is his relief and the hope that
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  Speaker 1: you can just begin to govern, you know, because since
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  Speaker 1: the second Mandate, which started in two thousand and fifteen,
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  Speaker 1: we have not had much of a government. So it's
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  Speaker 1: just showed to me. It's so ironic because Brazil was
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  Speaker 1: flying high, you know, andso left, and then Da Silva
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  Speaker 1: took over, and the scene with with with certainly Carlos,
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  Speaker 1: so that the foundation was there for growth and low
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  Speaker 1: inflation and investment, the leta Silva carry things on. And
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  Speaker 1: what happened with rece was it her fault? Was it
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  Speaker 1: her lack of good policy or things just turn enough
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  Speaker 1: that she was the one who got caught with the
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  Speaker 1: wrong chair or no chair when the music stopped. Yeah,
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  Speaker 1: I think I think unfortunately, I think it was utter incompetence.
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  Speaker 1: I mean, I think Lula, when he chose the successor,
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  Speaker 1: he could never have imagined that she could make such
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  Speaker 1: a mess out of the economy, and that she could
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  Speaker 1: be such a disaster politically as well, because you didn't
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  Speaker 1: speak to anybody, she didn't talk to Congress. You made
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  Speaker 1: enemies all over the place, including her own government, and
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  Speaker 1: so it was. It was really difficult, and frankly, I
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  Speaker 1: think the order of things is that I think Lula
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  Speaker 1: did pretty well in the first mandate. The second half
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  Speaker 1: of him his mandate, you have the global financial crisis,
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  Speaker 1: and then they began, you know, with Kanjian policies, you know,
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  Speaker 1: growth policies to make sure that Brazil would would stay
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  Speaker 1: on course, and that worked. The economists even picked it up.
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  Speaker 1: But the fact is that when she came in in
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  Speaker 1: two thousand and ten, she basically thought that was that
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  Speaker 1: was forever. You're just supposed to be spending money without
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  Speaker 1: any limits, and that was completely wrong. Obviously, you know,
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  Speaker 1: you cannot even do social policy just by dishing out
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  Speaker 1: of money without having it, and so this is really
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  Speaker 1: the main mistake. It was just just and that's the
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  Speaker 1: beginning of it. Not to mention all the charges that
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  Speaker 1: were real, that were constitutional. You know the constitution that
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  Speaker 1: does talk about the responsibility for all the fiscal accounts
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  Speaker 1: on the part of the president, and it was all
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  Speaker 1: very clear, very institutional, very legal. But but that was
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  Speaker 1: the beginning of it. I think, Yeah, I think it
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  Speaker 1: was a shame and for a lot of people, I
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  Speaker 1: think it would have been natural for you to have
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  Speaker 1: the institutions, the the you know, the privatization or whatever
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  Speaker 1: you had with Cardoza, then you had Lulo with the
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  Speaker 1: social inclusion, but understanding what macro economics was about. So
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  Speaker 1: what it was really a shame is how how the
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  Speaker 1: whole thing derailed was all of a sudden she forgot
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  Speaker 1: what macro economics was or didn't understand any of it
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  Speaker 1: and through the country under the bus. Basically that's what happened. Well, okay,
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  Speaker 1: so there were some would say these allegations of breaking
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  Speaker 1: budget laws. Other elected officials have kind of you know,
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  Speaker 1: they've fudged, they've cheated a bit, but they weren't brought
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  Speaker 1: to impeachment by it. But as you say, people didn't
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  Speaker 1: like her and she was mismanaging the can of me.
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  Speaker 1: It's understandable how this could be used against her now.
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  Speaker 1: Michael Tamer, the vice president who's now president are Bloomberg
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  Speaker 1: story written from from some follow from Brazilia, says a
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  Speaker 1: lot of people view him as part of the same
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  Speaker 1: political establishment they have come to distrust. Is he the
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  Speaker 1: right guy or is it going to take yet another
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  Speaker 1: president to get Brazil back on track? No, I think
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  Speaker 1: I think to get back on track he's been. I
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  Speaker 1: must say, I find that he is, uh, you know,
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  Speaker 1: the best you could get for for the current situation,
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  Speaker 1: considering all the ramifications and who happened to be at
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  Speaker 1: the vice presidency. The fact is he was never you know,
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  Speaker 1: a major part of Delmon's government. She didn't consult him,
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  Speaker 1: He was not really involved in any policy making. And
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  Speaker 1: the fact is, since he has come in when she
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  Speaker 1: was suspended, you know, once uh, he got to that
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  Speaker 1: point in the impeachment process, he already came in with
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  Speaker 1: a total different view. Basically, you know, he wants to privatize,
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  Speaker 1: he wants to to to deal with the fiscal disarrangement
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  Speaker 1: that we have. He has been doing so. He has
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  Speaker 1: the right finance minister, he has the right Central Bank president.
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  Speaker 1: And I think markets are still very optimistic, and I
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  Speaker 1: think they should be that at least we have the
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  Speaker 1: instruments with which to do what is necessary. I think
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  Speaker 1: the risk and the signpost you have to watch, of course,
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  Speaker 1: is going to be Congress, because a lot of the
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  Speaker 1: stuff you need to do, starting with a spending cap,
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  Speaker 1: which is something that he's been announcing since the beginning.
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  Speaker 1: There's a lot of support for it for those who
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  Speaker 1: understand economics and who can see what is needed for
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  Speaker 1: the country. Uh, that has to go through Congress. So
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  Speaker 1: that's what we need to watch between now in October,
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  Speaker 1: we're going to have the campaign and then the municipal elections,
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  Speaker 1: so it's kind of difficult to to vote, but I think,
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  Speaker 1: you know, until the end of the year, I think
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  Speaker 1: he will be able to vote on a spending cap,
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  Speaker 1: which is which is going to be unbelievable actually as
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  Speaker 1: a signal of commitment with fiscal response, fability Marco Marcot Needi,
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  Speaker 1: thank you so very much. Fiscal responsibility what Brazil needs
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  Speaker 1: now joining us from latam uh in a tornado intelligence
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  Speaker 1: This is Bloomberg