BRASILIA Nov 12 Former Wall Street banker
Henrique Meirelles is a frontrunner to be Brazil's next finance
minister, sources close to the government told Reuters, in what
would mark a major shift toward business-friendly policies in
President Dilma Rousseff's second term.
Meirelles, 69, is widely respected in financial markets and
was a main architect of the leftist ruling party's pragmatic
policies when he led the central bank from 2003 to 2010, a
period that twinned robust economic growth with low inflation
and strong anti-poverty programs.
He often clashed during those years with Rousseff, who
favors a more leftist, interventionist approach and has made
many economic decisions herself since taking office in 2011.
Latin America's biggest economy has stagnated under her
watch, averaging less than 2 percent growth per year or half the
expansion rate of the previous decade.
Fears that Rousseff would win re-election and continue the
same policies dragged Brazilian stocks down more than 20 percent
between early September and immediately after her narrow victory
on Oct. 26. They have since recovered slightly but remain
volatile over uncertainty about the economic course she will
Even some of Rousseff's allies - among them influential
former President Luiz Inacio Lula da Silva - are encouraging
her to choose Meirelles, who would likely oversee big budget
cuts and a return to more orthodox policies in an effort to ward
off a prolonged stagnation or downgrades of Brazil's credit
ratings next year.
"Until recently, nobody believed Meirelles could be in the
running, but his name is gaining ground and fast," said a senior
lawmaker with the ruling Workers' Party who met with both
Rousseff and Lula last week.
"She has acknowledged the need for more drastic changes to
turn the economy around," the lawmaker said on condition of
The lawmaker and other government sources said the other
leading candidate is Nelson Barbosa, the former deputy to
current Finance Minister Guido Mantega, who will leave
government before Rousseff's second term starts on Jan. 1.
Although Barbosa has publicly criticized the lack of
transparency in Brazil's public accounts, he is considered a
leftist economist who shares many of Rousseff's convictions that
the state should have a big role in the economy.
Meirelles, by contrast, is associated with the orthodox
economic views of the Brazilian Social Democracy Party - the
centrist party whose candidate, Aecio Neves, Rousseff defeated
Meirelles won a Senate seat on the PSDB ticket in 2002, but
then quit the party before taking over as central bank governor.
The Harvard-educated civil engineer and former senior
executive with now defunct BankBoston raised interest rates to
26.5 percent shortly after Lula took office in 2003.
That earned him the wrath of hard-liners in the Workers'
Party but helped ease fears in financial markets that Lula, a
former trade union activist, could lead the economy in a radical
Starting that year, Brazil's economy averaged 4 percent
growth under Lula and often had inflation under 5 percent.
Some say a similar dose of orthodoxy is needed now.
"Meirelles had a very good reputation as a central banker.
He will represent a shift back to more orthodox economic
policies and markets will welcome that," said Neil Shearing,
chief emerging markets economist at Capital Economics in London.
Workers' Party officials said Lula might run again for
president in 2018 and wants Rousseff to strengthen the economy
to secure a smooth path for his political return.
But for Meirelles to take the job, Rousseff would have to
offer him autonomy to dictate policy, sources close to Meirelles
"Without independence he will not take the job, period,"
said a source close to Meirelles.
The ideological divide and differences in style make some of
her aides doubt Rousseff will pick Meirelles.
"You can't work with somebody who thinks completely
differently from you," a member of her cabinet told Reuters
Meirelles, currently the chairman of the holding company
that controls the world's biggest beef producer JBS SA
, declined to comment via a spokesman.
The presidential palace also declined to comment.
(Additional reporting by Jeferson Ribeiro; Editing by Brian
Winter and Kieran Murray)