The Minister of Finance, Dario Durigan, criticized, this Wednesday (17), the proposed amendment to the Constitution (PEC) that grants financial and budgetary autonomy to the Central Bank (BC). The measure was approved by the Senate's Constitution and Justice Committee (CCJ) last week. In a public hearing in the Chamber of Deputies, the minister argued that it is not possible, under the pretext of strengthening the Central Bank, to create “a series of distortions” in the accounting of Brazil's monetary authority, as well as in the BC's audit process. Related news: Senate CCJ approves financial autonomy of the Central Bank. Galípolo asks for approval of the PEC that provides more autonomy for the BC. “Yes, it is necessary to strengthen the institution of the Central Bank, as well as other agencies, without us having a kind of new Power of the Republic, which can send a bill, which is not subject to audit by the Comptroller General of the Union [CGU]”, said the minister when answering questions from parliamentarians. PEC 65 of 2023, which will be voted on in the Senate plenary, establishes administrative, accounting, budgetary, financial, operational and patrimonial autonomy for the BC “with no link to the Ministry or any Public Administration body or system and hierarchical supervision or subordination”. >> Follow the Agência Brasil channel on WhatsApp The changes planned in the text worry Durigan. “Even for the protection of the Central Bank, which I think has to be very within the rules of the game”, he added. The Minister of Finance, Dario Durigan, participates in a public hearing in the Chamber - Photo: Lula Marques/Agência Brasil The proposal allows the BC to retain, in its budget, its own revenue created by seigniorage (resources arising from the issuance of currency). Currently, the BC's budget is defined by the Annual Budget Law (LOA), and seigniorage resources are transferred to the National Treasury. Seigniorage revenue was R$23.3 billion per year between 2017 and 2025, while the BC budget was R$4.8 billion per year in the same period. The government fears that the PEC will also bring a loss of revenue for the Treasury. BC co-option Brazilian economists published a manifesto against the PEC claiming that the text facilitates the co-option of the BC by the financial sector, which is supervised and regulated by the monetary authority, in addition to favoring the maintenance of high interest rates in Brazil. "The PEC creates selective independence: it removes the BC from the democratic control of the State [Congress, Court of Auditors of the Union, Executive], but keeps it structurally porous to the influences of the financial market. The brakes on the constituted powers are lost and access channels for the private sector remain open", says the manifesto. The document argues that the PEC weakens the supervision, social control and accountability of the Central Bank; increases public debt; and could create a unique model in the world that brings together financial and operational autonomy from the monetary authority. Dario Durigan criticizes PEC that grants financial and budgetary autonomy to the Central Bank - Photo: Lula Marques/Agência Brasil Financial autonomy In 2021, a law was approved and sanctioned that granted the BC administrative and operational autonomy in relation to the government, but the institution remains dependent on the Union Budget for the activities it performs. PEC 65 expands the BC's autonomy by allowing the monetary authority to retain its own revenue created with the issuance of coins. The proposal is defended by the board of directors of the Central Bank, led by president Gabriel Galípolo. He argues that the institution has limited resources to fulfill its mission of monitoring and regulating the financial system. The text is also defended by private banks, a sector that the BC has the obligation to regulate and supervise. The Brazilian Association of Banks (ABBC) and the Brazilian Federation of Banks (Febraban) have expressed their support for the proposal.