by Marcela Ayres
BRASÍLIA (Reuters) – The postponement of the payment of court orders by imposing an annual cap on this account will cause the voluminous unpaid obligations to be corrected by the Selic ahead, with a potential billion-dollar impact on public accounts.
The movement, which constitutes a fundamental pillar of the Precatório PEC, goes against the strategy adopted by the Treasury a few years ago of anticipating, within a few months, within the same year, the payment of the definitive defeats suffered by the Union in court, aiming to save with interest of monetary correction.
For 2022, the total account of court orders is 89.1 billion reais. By limiting the space to settle this item next year to the amount of precatório in 2016 adjusted for inflation, the PEC dos Precatório will reduce the invoice to 44.5 billion reais.
The remaining 44.6 billion reais will be played for 2023, a year that will also be affected by the new court orders that are yet to be registered. Considering an average Selic of 7.85% in 2022, which appears in the last grid of parameters of the Ministry of Economy, the maneuver will make the unpaid court orders need to be corrected by 3.5 billion reais.
The value exceeds, for example, the 3 billion reais provided for in the 2022 budget bill for the Doctors for Brazil Program, which seeks to guarantee care in regions where there is a shortage of these professionals through the training and provision of doctors for primary care to health.
The correction bill should be even greater, since the estimate for the Selic, extracted by the Ministry of Economy in September from the Focus bulletin, still did not incorporate the acceleration of inflation with greater impetus and the consequent indication by the Central Bank of the need for a cycle of tougher monetary tightening.
At the time, the Selic considered by economic agents for the end of 2022 was 7.65%. The current rate, of 7.75%, already surpasses this level, and the perspective is that it will end 2022 at 11.00%, according to the most recent Focus survey.
The higher the base interest rate, the greater the need for correction for unpaid court orders.
On condition of anonymity, a source from the Ministry of Economy reinforced that the interest of this correction are primary expenses and are part of the costs of court orders, which is why the Treasury sought to anticipate this payment by a few months when it had cash.
The anticipation was publicly pursued during the administration of former secretary Ana Paula Vescovi, who assumed command of the Treasury in the government of former president Michel Temer.
The current director of Macroeconomics at Santander, Vescovi told Reuters that, in addition to the correction charges, the PEC brings “great losses” for the country by putting the payment of a clear and certain debt into the future, in a country where the judiciary is already recognized for having several appellate instances.
“How much has been accumulated in unpaid court orders is not accounted for either as a deficit or as a debt. Again, it is an accumulation of skeletons, it is a setback in terms of transparency of public accounts”, he stated.
To avoid the formation of an unpayable stock of court orders, government and parliamentarians sought to ensure in the PEC outlets for unpaid court orders, including in the text the possibility of meeting accounts: taxpayers, states and municipalities that have the right to court orders will be able to use them, for example, to pay off obligations that they have with the Union in the scope of outstanding debt.
Another possibility will be the receipt by creditors, in the following year, of the amount due, provided they accept a 40% discount on that payment.
But a second government source considered that it is not possible to quantify to what extent these alternatives will actually be used and what will be the impact, therefore, on the volume of court orders to be corrected.
Vescovi praised the negotiation process that could be opened by the settlement of accounts and the fact that the PEC adopts the readjustment of the precatório by the Selic, compared to the current situation in which the correction depends on the nature of the precatório, which can be Selic or IPCA plus 6% per year .
She pointed out that this associates the updating of values to the cost of funding the Treasury, which is positive as it reconciles all forms of treatment by the Union in relation to its creditors and debtors.
But Vescovi stressed that the postponement of payments via PEC harms the country’s credibility and perception of legal security.
“The Union has many chances, even as a last resort, to appeal, to defend itself,” she said. “Not to mention that we can accumulate high values for the future and that will fall into someone’s lap. This is payment postponement, obviously.”
The PEC dos Precatórios still needs to be voted on in the second round by the Chamber of Deputies and then analyzed, also in two rounds, by the senators. In both Houses, the proposal needs the approval of at least three-fifths of the parliamentarians.
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