The presidency released a note to announce the replacement of the head of the ecnomic staff on Friday (Dec. 18) afternoon. The replacement happened after a troubled week in Congress, where they had voted the budget guidelines bill (LDO), the pluriananual plan (PPA) and 2016 budget.

Passed Thursday (Dec. 17), the LDO had one change after the text had been approved by the Joint Budget Committee in November: the reduction of the federal government's primary surplus target from 0.7% ($11.2 billion) to 0.5% ($7.8 billion) of gross domestic product (GDP), without deductions . The change has been proposed by Deputy Ricardo Teobaldo, responsible for the report, after negotiations with the government aiming to prevent the cut of $2.5 billion to the Bolsa Família conditional cash transfer program.

Levy has always defended that the fiscal target should stay at 0.7%, and has also appealed to party leaders on Monday (Dec. 14), to work for the approval of three provisional measures aiming to increase revenues, and thus avoid cutting Bolsa Família and other social programs, previously proposed by the budget rapporteur, Deputy Ricardo Barros. At the occasion, Levy reaffirmed the government's commitment to the fiscal effort target of 0.7% of GDP.

Levy's resignation was requested by several social movements, criticizing the way the adjustment had been conducted, not considering workers' rights. For several times, it was speculated that Joaquim Levy himself would resign, since some of his point of views, like increasing the fiscal adjustment's austerity, had been questioned by President Dilma Rousseff herself.

New Minister

Nelson Barbosa was executive secretary of Guido Mantega's team at the Finance Ministry in 2003. Under President Dilma Rousseff's first term of office, he conducted studies on tax alleviation measures aimed at boosting the economy, and designed a small tax reform in an attempt to gradually put an end to the tax war between states.

Earlier this year, he replaced former Minister Miriam Belchior, head of the Ministry of Planning, Budget and Management. Before that, he had taken part in the government's economic staff of former President Luiz Inácio Lula da Silva on other occasions.

From 2004 to 2006, he worked at the Brazilian Development Bank (BNDES), also alongside Mantega. In the Ministry of Finance, Barbosa headed the Secretariat of Economic Monitoring in 2007 and 2008, and the Secretariat of Economic Policy from 2008 to 2010.

He is a professor at the Federal University of Rio de Janeiro (UFRJ) and holds a PhD in economics from New School for Social Research, in the United States.