Lula Considers Appointing Geraldo Alckmin as Finance Minister

President Luiz Inácio Lula da Silva is considering appointing Vice President Geraldo Alckmin as his Finance Minister in a potential new term, according to people familiar with the discussions. The move is being framed as a strategy to bolster the administration's credentials with financial markets and attract centrist voters following the first round of the presidential election. Under the plan being studied, Alckmin would remain Vice President while simultaneously taking charge of the economic team.

Plan envisions dual roles and economic authority

Behind-the-scenes discussions indicate that the proposal remains under internal debate, with no official response from the Office of the President so far. Keeping Alckmin in the vice presidency while also heading the Finance Ministry would consolidate his authority over economic policy next year. This model would lend stability to the role, as the post would be held by an official viewed as immune to potential dismissal by the president.

In 2022, Lula also considered Alckmin to lead the economic portfolio, but opted to appoint Workers' Party member Fernando Haddad after emerging victorious at the ballot box. Now, revisiting the idea aims to directly address the scenario shaped by the election results.

Centrist profile and dialogue with the business sector

A veteran centrist politician and four-term former governor of São Paulo, Geraldo Alckmin ran for president against Lula in 2006. In the current administration, alongside the vice presidency, he assumed the leadership of the Ministry of Development, Industry, Commerce, and Services, where he served as one of the federal government's primary liaisons with Washington amid tariffs imposed by U.S. President Donald Trump on Brazilian exports.

Viewed as a moderate leader with strong ties to business leaders, Alckmin saw his influence overshadowed over the course of the administration by left-leaning public policies, critics argue. A potential move to the Finance Ministry seeks to win over voters focused on fiscal discipline who hesitate to vote for Flávio Bolsonaro but feel uncomfortable with populist tendencies.

Market reaction and first-round results

The drafting of the plan comes after Flávio Bolsonaro finished the first round ahead of Lula, securing 47% of the vote against the incumbent president's 45%. The outcome defied opinion polls, which had pointed to a Lula lead, and was accompanied by the election of a substantial right-wing bloc in the National Congress.

The advance of the PL senator and his allies drove gains on the stock exchange on the Monday following the vote. Market participants assessed that an administration under Flávio Bolsonaro would enjoy broader legislative support to enact fiscal consolidation more swiftly.

Fiscal landscape and statements by Lula

The economic debate is intensifying due to the rise in Brazil's gross public debt, which has grown by more than ten percentage points of Gross Domestic Product since the start of Lula's term, reaching 82.9%. The higher debt load represents one of the primary vulnerabilities highlighted by the opposition, even as inflation remains below historical averages, unemployment stays at record lows, and real wages continue to advance.

Shortly after the vote count, Lula defended his political coalition's financial record and reaffirmed his running mate's role in the race, declaring that no one has the moral authority to lecture him and Alckmin on fiscal policy and seriousness, citing both of their track records in São Paulo and across the country.

With reporting from Folha de S.Paulo, CNN Brasil, and VEJA.