(Bloomberg) -- The Finance Ministry signaled to the Ministry of Mines and Energy that it does not agree with the terms of the agreement between the government and Eletrobras, says Folha de S.Paulo, which does not reveal the source of the information.
Finance Minister Fernando Haddad does not want the federal government to give up a 3% to 5% stake in the company’s shares to take control of Eletronuclear and earn more seats on Eletrobras’s board of directors, according to the report. Mines and Energy Minister Alexandre Silveira still intends to convince the economic team, arguing that the negotiation guarantees a reduction in the energy tariff.
Eletrobras and the federal government are negotiating at a Conciliation Chamber after a request from Brazil’s Attorney General’s Office. Action was proposed in May 2023 with the purpose of ensuring the federal government’s right to vote, as a shareholder of Eletrobras, in a manner proportional to the participation that the public entity holds in the company’s share capital, following its privatization.
The agreement, however, might cost the federal government 12 billion reais ($2.1 billion), according to another report in the newspaper. The amount considers payment to the company to give up its stake in Eletronuclear and another 6 billion reais in Eletronuclear debts.
Pressure Relief
Two rulings from Supreme Court Justice Flavio Dino could reduce pressure to ease the 15 billion reais in budget freezes Haddad announced last month.
Dino determined that individual parliamentary budget amendments that allow the direct transfer of public resources, so-called “Pix amendments,” must have transparency, traceability and be monitored by Brazil’s Federal Audit Court and the comptroller general, according to the Supreme Court’s website. The determination also applies to transfers made before the minister’s decision, which will be submitted to the court’s virtual floor session later this month.
The ruling came out shortly after Dino also concluded a conciliation hearing for effective compliance with the top court decision that overturned the so-called secret budget, according to O Estado de S. Paulo.
This means that the government will no longer be able to pay out surpluses from the “secret budget” without transparency. The decision from Dino, a former minister in President Luiz Inacio Lula da Silva’s government, aims to put an end to the practice, which served to refine the relationship between lower house Speaker Arthur Lira, deputies from centrist parties and the government of former President Jair Bolsonaro, said local newspapers.
The measures slow down the execution of the budget and should serve to alleviate the pressure that the federal government will face from Congress to loosen the contingency and blockage announced by Haddad, according to Valor Economico.
Lula himself will likely benefit from greater room to maneuver in managing the budget, says the report.
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