Pix and education should be areas most benefited by unblocking the Budget

Education will be another area that will have resources restored, but it is not yet clear what value will be unlocked.

The economic team's strategy is to return resources selectively, and not proportionally to the cuts suffered by each body, according to reports from government members heard by Folha de S.Paulo.

Last Friday (24), the Executive published a new budget programming decree reducing the volume of blocked expenses. The measure was made possible after the improvement of mandatory expenditure projections presented in the bimonthly revenue and expenditure assessment report and opened space to alleviate part of the restrictions that had been affecting ministries, universities, regulatory agencies and other federal bodies.

The release will take place on the eve of the electoral campaign and will allow the government to carry out more spending. There is no prohibition in the legislation regarding the release of resources within the scope of the Budget, as long as tax legislation is being complied with, but naturally there is pressure from sectors of the government to implement public policies.

Despite the relief, the economic team is still working with a significant volume of blocked expenses, of R$17.9 billion, to ensure compliance with the limits set out in the fiscal framework. The Central Bank should be awarded R$75 million, an amount considered fundamental for investing in Pix's security. The details should be released this Thursday (30) by the Ministry of Planning and Budget.

The monetary authority suffered a cut of R$92.4 million in the second two months of this year. Members of the economic team say that, in addition to the unblocking that will be carried out for the agency, there was also an additional credit of R$45 million to restore the municipality's budget.

As shown by Folha de S.Paulo, cuts to the BC's budget have postponed technological update projects and innovations in the instant payments system through which around R$3 trillion in transactions pass per month, the target of criticism from the United States and focus within the scope of the diplomatic dispute between the Donald Trump government and Brazil.

Of the total blocked, R$18.7 billion falls on discretionary Executive expenses and R$5 billion on parliamentary amendments. The biggest blockages affect the ministries of Defense (R$4.4 billion), Cities (R$3.3 billion), Education (R$1.6 billion), Transport (R$1.5 billion), Finance (R$1.4 billion) and Health (R$1 billion).

Blocking resources in the Budget is mandatory when total expenses exceed the limits established in the fiscal framework. As mandatory spending tends to rise beyond estimates, the government needs to freeze discretionary spending to comply with tax legislation.

The guideline is to direct the resources released to expenses whose interruption may cause a greater impact on the provision of public services. Among the priorities are actions in the area of ??education, including research grants and other expenses considered essential for the functioning of teaching and research institutions.

According to members of the economic team, the logic of the recomposition will be different from that adopted in the distribution of the blockades. While the cuts needed to follow fiscal criteria and affected several public administration bodies, the return of resources will seek to preserve public policies considered strategic.

In practice, this means that bodies that have suffered similar reductions may receive recompositions in different proportions, depending on the government's assessment of the urgency and relevance of each expense.

The definition of priorities also seeks to reduce the risk of service interruptions and avoid further strain on the government following successive warnings from universities, research institutes, regulatory agencies and the Central Bank itself about difficulties in maintaining contracts, investments and activities considered essential until the end of the year.