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Bolsonaro opens a new crisis at Petrobras and raises doubts in the market

Sao Paulo, Feb 22 (EFE) .- The Brazilian president, Jair Bolsonaro, has opened a new crisis in Petrobras by announcing a retired Army general as the new president of the state oil company, whose papers sank this Monday in the stock market, and it raised doubts about his commitment to economic liberalism. The appointment of Joaquim Silva e Luna, former Defense Minister in Michel Temer’s government (2016-2018) and current director of the Brazilian part of the Itaipú hydroelectric plant, has yet to be ratified by the Petrobras Board of Directors but has already caused an earthquake in the financial market. The shares of the largest company in the country and the most strategic for the Brazilian state fell by around 20% at midday on Monday on the Sao Paulo stock market. Petrobras has lost about 100 billion reais (18.2 billion dollars) in market value since last Friday the departure of Roberto Castello Branco, a technical economist chosen by the Minister of Economy, Paulo Guedes, was leaving the command of the company. who has not yet commented on the matter. “The market is very stressed by Bolsonaro’s decision. It is a horrible signal, a terrible interference, although we have to wait for the next chapters,” Rodrigo Fontana, resource manager at Guide Investimentos, told EFE. “This is a time more for questions than for certainties,” he added, given the suspicions that the president will soon undertake similar changes in the electricity sector. THE BEGINNING OF A “MORE POPULIST” BOLSONARO? Bolsonaro, captain of the Army reserve, an institution that has historically had a statizing profile in Brazil, committed himself in the 2018 electoral campaign to economic liberalism and fiscal adjustment, which earned him the credit of a financial market that now suspicious of him. In this context, Fontana doubts whether the change in Petrobras, state-controlled but with shares traded on the Sao Paulo, New York and Madrid stock exchanges, is “something specific” or the beginning of a “more populist” Bolsonaro in the face of the presidential elections of 2022, to which he intends to run. Pressured by the trucking sector, which threatened a new strike like the one that paralyzed the country in May 2018, the president on Monday justified his decision and demanded “transparency and predictability” from the oil company. In his opinion, the rise in fuel prices – of about 30% so far this year – is not justified and he took the opportunity to launch harsh criticisms of the current management of Petrobras and the economic agents. “Some in the financial market are very happy with Petrobras’ policy, which has only one bias: serving the interests of some groups in Brazil,” he denounced. “Is the oil ours or is it from a small group here in Brazil?” Asked the far-right leader. He also complained that Castello Branco has been working from home for “eleven months”, as a precaution against the coronavirus pandemic, which has a fervent denier in Bolsonaro. “It is inadmissible,” he sentenced. For Nelson Marconi, professor at the Getúlio Vargas Foundation (FGV) center for economic studies, Bolsonaro may be taking a “turn” in his speech because he believes that it can favor him in his popularity ratings, although his position is framed within what he defended “the whole life” as a politician. “The market bought a president who believed he was going to promote a liberal agenda, when he was never liberal. Although, on the other hand, I consider Petrobras’ pricing policy to be crazy,” the analyst told Efe. VICE PRESIDENT MOURAO SUPPORTS HIS “COMRADE” For his part, the Brazilian vice president, Army Reserve General Hamilton Mourao, rejected, like Bolsonaro, that the change of president is an interference and limited the matter to a “question trusted. ” In addition, he described the financial market as an “electronic herd”, after the sharp drop in Petrobras’ price on the stock market, and said that Joaquim Silva e Luna is an “extremely prepared comrade.” If he is finally ratified for the position, Silva e Luna will be Petrobras’ first military president since the times of the dictatorship (1964-1985), a period that Bolsonaro has repeatedly defended. (c) EFE Agency

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