Default, shaving, plucking: Haddad distorts facts to claim “cursed inheritance”

Finance Minister Fernando Haddad has played a central role in the government's strategy of blaming the previous administration for the lack of control over public finances — labeled as a “cursed inheritance.” To support this argument, excerpts from a video in which the minister presents distorted information have been replicated on social media by PT supporters.

The leaders of the PT were the ones who started the process, including the party's official profile and that of the Minister of Institutional Relations, Gleisi Hoffmann, after statements made by Haddad at a hearing in the Chamber of Deputies – a meeting that, by the way, ended after an argument between the minister and deputies Nikolas Ferreira (PL-MG) and Carlos Jordy (PL-RJ).

Haddad's allegations attempt to justify the primary deficit accumulated in the first two years of Luiz Inácio Lula da Silva's (PT) government – ​​R$241.5 billion, or 2.2% of GDP – and disqualify the surplus recorded in the last year of Jair Bolsonaro's (PL) administration. The 2022 result, of R$54.9 billion or 0.6% of GDP, was the only positive balance in the federal primary accounts from 2014 to today.

Haddad attributed Bolsonaro's number to what he called "defaults" on governors and court orders, "shaves" in the privatization of Eletrobras and the "plucking" of Petrobras. "So, anyone can make a surplus," the minister said.

An analysis of the facts, however, dismantles the main points of this narrative.

1. Petrobras dividends and the accusation of “plucking”

One of the minister's false arguments concerns Petrobras' record dividend distribution in 2022 — more than R$200 billion. According to Haddad, the Bolsonaro government would have “plucked” the state-owned company to artificially inflate the primary surplus.

The distribution, however, was due to extraordinary results – record profit of R$188.3 billion, with a 77% increase compared to the previous year – obtained with the global rise in the price of oil and gains from improved management.

The dividend policy approved by the board of directors, in compliance with corporate governance rules, was only possible after years of financial recovery. The restructuring began in 2016, under the Michel Temer (MDB) government, with policies of divestment, austerity and focus on the company's core business – practices that were continued under the Bolsonaro administration.

During the PT governments, Petrobras suffered billions in losses – related to the freezing of fuel prices and poor quality investments – and was involved in the biggest corruption scandal in Brazilian history, revealed by Operation Lava Jato. The reversal of this situation, with the end of the PT administrations, was essential for the company to return to distributing profits.

Furthermore, the Lula government itself benefits from dividend distributions. In 2023 and 2024, Petrobras transferred approximately R$30 billion per year to the Union, resources that helped balance the Treasury's accounts.

2. The "shave" of the privatization of Eletrobras

Haddad also criticized the privatization of Eletrobras, approved by Congress in 2021 and carried out in 2022, classifying the process as a “shave” made “in the basin of souls”, which would have generated losses to public assets and helped the fiscal result.

"Anyone can create a primary surplus like this. By defaulting on payments, selling off public assets," said Haddad. However, revenue from privatizations and concessions is not included in the calculation of the primary result. The federal government can only use the funds to pay off the public debt, as determined by law. Therefore, it did not inflate the Bolsonaro government's surplus.

The objective of the transaction was to reduce the tax burden of a state-owned company that is dependent on high investments and vulnerable to political interference. The sale maintained the government's veto power over strategic decisions ( golden share) and allocated part of the resources to moderate tariffs and balance the electricity sector. Workers were also able to use their FGTS to buy shares in the company, which expanded the investor base and democratized access to the market.

The criticism also ignores the state-owned company's history of mismanagement and political manipulation under previous governments, including that of the PT itself. The market interpreted privatization as a way to shield the company from interference that undermined its efficiency in the past.

Lula has already mentioned renationalizing Eletrobras at least three times. In February 2023, he signaled that the AGU could challenge the terms of the process. The following month, he called the privatization a “crime against the country.” And in May 2023, he returned to the topic by criticizing the company's governance and filing a lawsuit with the Supreme Court to challenge the proportional voting model.

3. Reduction of ICMS on fuels and compensation to states

The Finance Minister also criticizes the policy of reducing ICMS tax on fuels in 2022, adopted by the Bolsonaro government amid the international rise in oil prices caused by the war between Russia and Ukraine.

Haddad accuses the former president of having “swindled” the governors by promising federal compensation for the loss of state revenue — a commitment that, according to Haddad, was only fulfilled in 2023, during the Lula administration, with the transfer of R$30 billion.

“Bolsonaro defaulted on the governors, took the ICMS on fuels with the promise of paying,” said Haddad, classifying the measure as a “sham” used to “artificially lower the price of gasoline in an election year.”

At the time of the tax relief, in view of inflationary pressure, the Bolsonaro government made the decision to reduce federal taxes and sponsor a reduction in the ICMS (state tax) on fuels, in coordination with Congress. The strategy avoided unorthodox measures, such as price freezes, which have historically generated distortions.

The compensation amounts to the states for the loss of revenue from ICMS were partially provided for in the Annual Budget Law (LOA) of 2023. This provision occurred in the context of the Transition PEC (Constitutional Amendment 126/2022), approved in December 2022, still under the Bolsonaro government, but with the active participation of the transition team of president-elect Lula.

The formal agreement with the states, which defined the amounts and payment schedule, was only signed in 2023, during the Lula government, after pressure from the governors.

4. Precatórios: maneuvers eased Bolsonaro's accounts, but also Lula's

Haddad also attacked what he called the “default” on court orders promoted in 2021, when Congress approved Constitutional Amendments 113 and 114, creating an annual payment ceiling for these debts until 2026. The mechanism allowed a large part of the court orders to be excluded from the spending ceiling, artificially alleviating the primary result.

Despite the criticism, the Lula government has been using a similar strategy. In 2024, for example, R$73 billion in court orders were paid via extraordinary credits, but these amounts were not included in the calculation of the deficit, which officially stood at R$11 billion. In practice, the real deficit would be R$84 billion, more than triple the target of R$27.7 billion.

In 2023, the STF validated this practice when ruling on ADI 7064, allowing payments up to 2026 to be exempt from the fiscal rules — including the new framework. The deadline, however, expires in 2027, which could put even more pressure on public finances if there is no legal change or new court decision.

5. Interest rates and Campos Neto's "fault", according to Haddad

In addition to issues related to the primary surplus, another argument that Haddad has repeated to reaffirm Bolsonaro's “cursed inheritance” concerns the basic interest rate, which reached 15% per year at the last meeting of the Monetary Policy Committee (Copom).

Haddad shows concern about the current level of the Selic rate, but exempts the current president of the Central Bank, Gabriel Galípolo, from responsibility, in contrast to the critical stance that the government and the PT maintained in relation to his predecessor, Roberto Campos Neto.

In an interview with TV Record News on Tuesday night (24), Haddad pointed to the previous management of the BC as being responsible for maintaining the rate at such a high level.

“I am obviously concerned. It is a very restrictive interest rate, well above projected inflation,” he said. He claimed that the increase had already been “agreed” since the last meeting under Campos Neto, in December 2024. “To be very honest, anyone in the industry knows that this increase was agreed upon at the last meeting attended by Roberto Campos in December. It is as if a future rate contract had been established,” he complained.

The argument does not hold water. When speaking of a "contracted" increase in the Selic rate, the minister was referring to the 1 percentage point increases made in the first two Copom meetings in 2025. These adjustments were signaled by the committee in December 2024, in the last meeting under Campos Neto's leadership.

However, after these two hikes, Copom promoted two other increases in the Selic rate, which added up to 0.75 points. And, in any case, all four meetings in 2025 were chaired by Galípolo, and in all of them the decision on interest rates was unanimous. Of the nine members of the current Copom, seven were appointed by Lula.

Even with Haddad's criteria, the current government remains in deficit

Economist Fernando Ulrich, from Liberta Investimentos, redid the fiscal calculations based on public data from the National Treasury Secretariat based on the criteria used by Haddad — that is, excluding revenues from privatizations, dividends from state-owned companies and the non-payment of court orders — and concluded that the result of the Lula government is even worse.

According to Ulrich, if the R$55 billion surplus in 2022 is adjusted for these variables, the balance becomes a deficit of R$50 billion. For 2023, the corrected deficit rises to R$171 billion, and in 2024, it should be around R$64 billion. The calculation also includes adjustments in ICMS collection, such as the re-taxation of gasoline.

“Even considering Haddad’s perspective and criteria, the current government would still be in the red,” the economist said in a comment on YouTube. “What the Ministry of Finance is doing with the public accounts is complete destruction, it is a fiscal hole by decision due to a lack of commitment to controlling the public accounts, because this is the nature of this government.”