Rousseff acted with excessive responsibility in fiscal measures, economist says

Economist Luiz Gonzaga Belluzzo, the first defense witness called in the impeachment trial of suspended President Dilma Rousseff, said she acted with excessive responsibility in carrying out the fiscal measures in 2015, adding that "the suspension of the president for the reasons given is an attack on democracy." He described the impact made by the enactment of the supplementary decrees, despite not being authorized by Congress, as "ridiculous."

According to Belluzzo, at the moment the presidential decrees were issued, "the president had carried out a contingency measure totaling $21.7 billion and subsequently another one, adding up to $2.6 billion." The moves were a failed attempt to compensate for the effects of a decline in tax collection. "It was fiscal responsibility in excess," he argued.

Belluzzo said that, unlike what the prosecution sustains, in 2015, "when the economy was losing revenue, the president implemented the contingency measure." "This is called procyclical action," he added. He further said that he predicted the consequences of the fiscal adjustment initiated then as early as 2014. "The fiscal policy carried out throughout 2015 led to a brutal shrinkage in revenues." Likening the economy to a worn out boxer, Belluzzo said that, "in order reanimate him, [the government] punched him in the head."

Regarding the Plano Safra, a government initiative which provides subsidized credit to family farmers, Belluzzo noted that the cut in the plan would have major effects "as Brazilian agriculture would be left unprotected." The economist went on to argue that the actions taken by the government should be termed a fiscal, rather than credit, operation.

To speed up the testimonies from the defense witnesses, the senators in favor of impeachment decided to not ask questions.