Lula’s actual Finance minister - Valor International
Two absences drew attention at President Luiz Inácio Lula da Silva’s lunch meeting with economists on Thursday (5): that of reelected Piauí Governor Rafael Fonteles (Workers’ Party, PT), who remains a potential candidate for the Finance Ministry but has since retreated from the spotlight; and that of André Lara Resende, who had no meeting scheduled with Lula, as Finance Minister Dario Durigan clarified.
In addition to hearing the guests’ views on measures to curb the rise in public debt, the president is obsessed with finding viable ways to bring interest rates down. Some aides advised him to announce the name of the next Finance minister ahead of time. If the chosen candidate commits to some form of fiscal adjustment—Lula has ruled out a rigorous one—and earns the market’s confidence, long-term interest rates could begin to fall, paving the way for a gradual reduction in the Selic rate. But the president rejected the idea of making an early announcement. More than that, sources close to the presidency say he has not yet chosen a finance minister or formally extended an invitation to anyone.
At the beginning of the week, reports that Lula might meet with Lara Resende set off alarm bells in the market, as his ideas for lowering interest rates are considered radical. Behind the scenes, Lula himself was troubled by the news. In a conversation with aides, the president recalled that he had a brief meeting with the economist in 2023, when Resende offered to help the government. At the time, Resende was brought to the Planalto Palace by then-Finance minister Fernando Haddad. Lula has not spoken to the economist since.
Meanwhile, Fonteles’ withdrawal from the national spotlight, following a week of intense media exposure, raised questions about whether he was still in the running for the Finance Ministry. Valor checked with government and market sources, who confirmed that the Piauí governor’s name remains under consideration. However, following advice from allies and people close to him, the governor has adopted a lower profile and turned his attention back to Piauí.
Although absent from Lula’s meeting with economists, Fonteles remains in frequent contact with the president. This week, for example, he was among those consulted on the text of a speech recorded on Thursday (5) and scheduled to air on Sunday (8).
After emerging as one of the leading coordinators of Lula’s campaign in the second round—working in close coordination with former minister Camilo Santana (PT) and Communications Secretariat Minister Sidônio Palmeira—Fonteles gave interviews to several national media outlets. His intense media exposure was interpreted as a sign that he was putting himself forward for the ministry, prompting criticism and even friendly fire from within his own camp.
Some factions of the PT and allied parties believe it would reflect negatively on Lula to invite Fonteles to join the ministry, forcing him to resign before beginning his second term as governor. Such a move would weaken the PT’s position in the state and open the door to the opposition.
A PT leader compared Fonteles’ situation to the move by former minister and former Bahia governor Waldir Pires, which ended badly. In 1989, Pires resigned as governor halfway through his term to run for vice president on the ticket headed by Ulysses Guimarães. The Brazilian Democratic Movement (MDB) candidate, however, finished in seventh place, with 4.4% of the vote. In addition, the MDB lost the support of Bahia’s electorate. With high rejection ratings, Pires’ successor as governor, Nilo Coelho, ultimately paved the way for Antônio Carlos Magalhães to return to power in the state.
A source with close ties to the financial market told Valor that the Piauí governor made a good impression during a recent visit to São Paulo. “He is a mathematician, so he knows how to do the math, and he is personable,” the source said. “He is a great storyteller,” the source added, saying Fonteles knows how to charm those he speaks with.
While Lula considers the composition of his new government, Fonteles is continuing a low-key campaign in Piauí. On social media, he announced that the state’s Planning and Finance secretaries would remain in their posts, using the opportunity to once again highlight the state’s figures: Piauí has the highest investment-to-revenue ratio, received a B+ rating from the National Treasury and keeps spending under control. “Long live fiscal balance!” he posted, in the language of the market.
Alongside Fonteles, however, other names remain under consideration for the job: Vice President Geraldo Alckmin (Brazilian Socialist Party, PSB), who has a track record of fiscal discipline as a former governor of São Paulo, and the current Finance minister, Durigan, who has not been ruled out.
Those advocating for Durigan to remain in the government point out that he has worked in close coordination with Planning Minister Bruno Moretti. Together, they have drawn up measures for a gradual fiscal adjustment that would not run counter to Lula’s preferences, potentially even allowing for a primary surplus in 2027.
Amid all the uncertainty, those who have known the president through several political seasons—or, rather, several terms in office—understand that regardless of who takes the Finance minister’s seat, the final word on fiscal policy will invariably belong to Lula.
This article was translated from Valor Econômico using an artificial intelligence tool under the supervision of the Valor International editorial team to ensure accuracy, clarity, and adherence to our editorial standards. Read our Editorial Principles.
