After the crisis of the economic team to include funds in the 2018 budget and to compensate for the deficits that Venezuela and Mozambique have made in loans that the Brazilian government has provided as guarantor, the Ministry of Finance has decided to increase the Export Credit Insurance ( SCE).
The idea is to create a financial fund of a private nature with its own "mattress" with means to pay the debts in case of default of the borrower. The new design prevents the costs from covering any defects by spending space on areas such as health and education within the ceiling.
The proposal began to be discussed after Brazil was almost bankrupt for the international financial system because there was no money in the budget to pay payments to BNDES and Credit Suisse. The banks activated the insurance contract in the Export Guarantee Fund (FGE) of the Ministry of Finance, after confirming the defaults of the two countries, but the National Congress opposed approving the credit. It was the first time that Brazil had to cover the guarantee.
Details of the new model are closed by the economic team, but the intention is to keep everything ready so that the next government can implement it. The drawing would only apply to new operations, as there are legal doubts about the possibility of transferring guarantees already granted to the newly created fund. In the 2019 budget proposal, R $ 1,467 billion has already been earmarked for these guarantees, still subject to approval by Congress.
The new fund would consist of the proceeds of premiums paid by banks that conclude the Brazilian guarantee. The Brazilian Agency for Guarantee and Guarantee Funds (ABGF) would be an important basis for managing the funds and providing capital support to the operation, especially in the beginning, when the fund still had few resources. According to Marcello Estevão, Secretary of International Affairs of the Ministry of Finance, who heads the project, the amount that the fund has to reserve for any defaults is still being calculated.
The effect could only fall on the federal treasury if this capital is insufficient to cover deficient installments, a hypothesis that technicians consider difficult. "It will probably never hit the Union," Estevão said. On the other hand, the government could include revenues that exceed the ideal value that is considered as a reserve in the fund.
Under the current FGE rule, the premiums paid by the banks upon entering into the Brazilian guarantee are transferred to the Treasury's single account, which contributes to the primary result, but each guarantee payment must pass through the budget and ceiling space. Take in custody. There was a risk that Brazil would enter into a "technical default", a situation in which foreign creditors can request early settlement of the country's debts. The information comes from the newspaper The state of S. Paulo.