The Itamar Franco government it was the result of the impeachment of Fernando Collor de Mello, president of Brazil between 1990 and 1992. Itamar ended up governing Brazil for the remainder of Collor's term. He assumed the presidency on December 29, 1992 and left on January 1, 1995.
This government was marked by having accomplished one of the greatest achievements in the country's recent history:the stabilization of the economy and inflation control . This occurred through the appointment of Fernando Henrique Cardoso to the Ministry of Finance. The work of him and his team of economists in stabilizing inflation in Brazil was carried out through the Plano Real .
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Who was Itamar Franco?
Itamar Franco was a traditional politician and had a more regional than necessarily national projection. In 1992, he became president of Brazil, but his political trajectory was long-standing. Before the dictatorship, he was part of the Partido Trabalhista Brasileiro (PTB) and, in the years of the Military Dictatorship, he joined the opposition party to the regime, the Brazilian Democratic Movement (MDB) .
he governed the city of Juiz de Fora, in Minas Gerais, for two terms and was involved with the process of redemocratization of Brazil . In the 1980s, Itamar Franco was a senator, participated in the campaign of Diretas Já and, in the 1985 presidential election, he voted for Tancredo Neves.
In 1986, he launched himself into the dispute for the government of Minas Gerais by the Liberal Party (PL). He ended up being defeated by the great support that the PMDB had at the time due to the Cruzado Plan. The candidate who defeated Itamar at the time was Newton Cardoso. Itamar was also part of the Constituent Assembly that drafted the 1988 Constitution.
1989 Election
In 1989, the first presidential election was held by direct vote since 1960. Itamar Franco did not run for the presidency, but received an invitation from Fernando Collor, who would run for president, to be vice. Collor, at the time, was governor of Alagoas and candidate for the presidency by the PRN.
Collor's invitation to Itamar to compose the slate for the 1989 election was purely for strategy policy, and not by ideological proximity. That's because Itamar Franco was not a liberal like Collor, but a nationalist, developmentalist politician who defended a strong influence of the State in the economy.
Collor's invitation to Itamar Franco was due exclusively to the fact that Itamar was an important politician in Minas Gerais. Thus, an alliance with him could earn Collor very important votes in that state. Minas Gerais is one of the most important electoral colleges in Brazil.
The differences between Itamar and Collor were so evident that historians say the relationship between the two has always been unstable. Itamar even threatened to abandon Collor's ticket twice during the electoral campaign, but ended up backing down. Despite the differences, Collor's campaign was a success and he won in the second round with 53% of the votes . Itamar was sworn in as vice president of Brazil.
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Collor's Impeachment
Collor's presidency, however, was deeply troubled. He failed to fight inflation and ended up being denounced in early 1992 for illicit fundraising through its campaign treasurer, PC Farias . Investigations by the Parliamentary Commission of Inquiry (CPMI) showed that Collor directly benefited from the corruption scheme.
During the investigation, Itamar Franco claimed to be innocent, declaring himself exempt from any corruption scheme. He then joined the PRN, the president's party, and returned to the PMDB, the party he left in 1986 to run for governor of Minas Gerais. Meanwhile, the population took to the streets demanding the removal of President Collor.
On September 29, 1992, Collor was removed provisionally from the presidency, and Itamar Franco assumed the post on an interim basis. On December 29, 1992, Collor's impeachment process was ratified after a vote in Congress and the Senate. With that, on that date, Itamar Franco was officially sworn in as president of Brazil . He would govern Brazil in the final two years of that government.
Itamar Franco Government
Itamar Franco's great challenge in the presidency was the same by Sarney and Collor:the economic crisis and the high inflation . This crisis had dragged on since the 1980s, and Brazil had gone through a series of economic plans – all of them failed –, it had changed its currency several times, but inflation remained high. In 1992, for example, inflation reached 1109% .
During the first months of his government, Itamar Franco skated on the economic issue. He appointed three people to the Ministry of Finance – Gustavo Krause, Paulo Haddad and Eliseu Resende – and none of the nominees managed to solve the problems of the Brazilian economy. These appointments took place between October 1992 and May 1993.
In May 1993, Fernando Henrique Cardoso , an important Brazilian sociologist who entered political life in the 1980s, was invited to take over the portfolio of Farm . Before this ministry, FHC was occupying the Ministry of Foreign Affairs. At Fazenda, Fernando Henrique received autonomy from the government to assemble his team as he wanted.
It was the work of FHC and his team of economists at the head of the Plan Real that solved our country's economic problems and stabilized inflation. This was the great legacy of Itamar Franco's government .
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Flat Real
The Real Plan it was an important moment in the recent history of Brazil. This plan was created by Fernando Henrique Cardoso and his team of economists at the Ministry of Finance. The economists invited by FHC were involved with other economic plans elaborated in other governments. Under Itamar Franco, these economists were able to correct their mistakes and create a different plan than what had been done so far.
Unlike the other plans, in the Real Plan, there was no shock policy and all the proposed economic changes were explained openly to the population, who understood what was being done, adhered to and supported the new economic plan. This does not mean that there were no criticisms, as they did exist, carried out mainly by the PT.
The Real Plan was implemented in three steps throughout 1993 and 1994 and passed through the Legislature. There was a lot of suspicion that the plan could harm the poorest workers and, therefore, parties such as the PT did not give their support. The three stages included the stabilization of public accounts, with a reduction in expenses and an increase in revenue; launch of a virtual currency to prepare the transition from the cruzeiro real to the real and, finally, the launch of the new currency, the real .
Right away, the Plano Real proved to be successful , as it caused inflation in Brazil to fall considerably. In 1993, annual inflation in Brazil was 2477%; in 1994, 916%; in 1995, 22% .
Some criticisms were made at the time of the amount of privatization under Itamar Franco's administration, in addition to the fact that the Real Plan increased unemployment and kept the purchasing power of workers at a low level. Even so, the end of high inflation ended up making Fernando Henrique Cardoso a candidate for the presidency of Brazil.
President Itamar Franco supported FHC's candidacy, launched by the PSDB, and the then Minister of Finance was elected president in the first round with 54% of the votes .
Image credits:
[1] Federal Senate Archive and Célio Azevedo
[2] A.PAES and Shutterstock