O Government of Itamar Franco it extended from late 1992 to January 1, 1995. The Minas Gerais politician assumed the presidency of Brazil as a result of the impeachment suffered by Fernando Collor de Mello in December 1992.
The government of Itamar Franco was responsible for stabilizing the Brazilian economy through the FlatReal, headed by its finance minister, Fernando Henrique Cardoso.
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Itamar Franco's political career
Despite having been president of Brazil, Itamar Franco's political career was not known by many, even in the 1990s. Itamar Franco was a politicalminer and his entire political career was carried out in his state of birth. Before dictatorship, was affiliated with the Brazilian Labor Party (PTB), and his political career unfolded during this period in the Brazilian Democratic Movement (MDB).
Was elected mayor of the city of Juiz de Fora in two terms between 1967-1971 and 1972-1973. In the late 1970s, he was elected
senatorby MDB and, in 1982, he was reelected as a senator by the PMDB, the party that succeeded the MDB. He became involved with the campaign of Direct now, he was against the indirect election, but voted for Tancredo Neves.In 1986, he left the PMDB and joined the Liberal Party (PL) to run for the governorship of Minas Gerais. In the election, he was defeated by PMDB candidate Newton Cardoso. Defeated, he returned to the post of senator to finish his term. Furthermore, participated in the constituent Assembly who drafted the 1988 Constitution.
Alliance of Itamar Franco with Fernando Collor
![In the 1989 election, Itamar Franco was the vice president of the ticket formed with Fernando Collor.[1]](/f/203b8354b6726346cebfcdc2f8a670fb.jpg)
At the end of his term as senator, Itamar Franco received the invitation to Fernando Collor to join him in the 1989 presidential election. Itamar Franco was invited for a strategic and not an ideological question, as his alliance with Collor it could bring important votes from Minas Gerais to Collor, while it could win over those who didn't trust the economic agenda of the presidential candidate.
It is clear then that the alliance between Collor and Itamar Franco was purely for convenience, especially because Itamar was a politician with different characteristics from what Collor defended. Historian Marly Motta defines Itamar Franco as a politician “with a statist, nationalist and developmental matrix”|1|.
At ideology differences between Fernando Collor and Itamar Franco yielded countlessfrictions between the two both during the electoral campaign and during Collor's government. Itamar Franco even threatened to resign his candidacy as vice president twice and historians Lilia Schwarcz and Heloísa Starling claim that Collor and Itamar Franco “did diverged from the launch of the candidacy to the end of the government"|2|.
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Impeachment by Fernando Collor de Melo
In the first half of 1992, the first complaints about President Collor's involvement with corruption. When the actions of Collor's campaign treasurer, PC Farias, began to be investigated, the president's connection with corruption schemes began to become increasingly evident.
In May, a strong complaint involving PC Farias and Collor in the collection of illegal funds in 60 million was released and, in June, a Parliamentary Inquiry Commission (CPI) was established. With the investigations against the president, Itamar Collor declared himself exempt and not involved in any corruption scheme and he shunned the National Reconstruction Party (PRN). He ended up returning to the PMDB, the party he had abandoned in 1986.
On September 29, 1992, the National Congress decided for the Collor's temporary leave the function of president, making Itamar Franco the temporary president of Brazil. when collor went officially deprived of his position, on December 29, 1992, Itamar Franco was made official as president of Brazil.
Itamar Franco government
![Itamar Franco (second from left to right) ended up officially governing Brazil from December 1992 to December 1994.[2]](/f/8f3b2b163450a222b7d813e058348b92.jpg)
When Itamar Franco actually assumed the presidency, the situation in the country was extremely complicated. Brazil was dragging itself in a economic crisis since the 1980s, having gone through “four types of currency, five price freezes, nine economic stabilization plans and eleven different indices to measure inflation”|3|.
Therefore, the major actions of the government of Itamar Franco were aimed at this area of the country: the economy. In the first months, Itamar Franco skated a lot in his choices and appointed three ministers who did not last long in office. They were: Gustavo, Krause, Paulo Haddad and Eliseu Resende. The three were sworn in at different times between October 1992 and May 1993.
Starting in 1993, Itamar Franco nominated Fernando Henrique Cardoso, a traditional sociologist who entered politics in the 1980s. Itamar Franco gave FHC carte blanche to set up his team at the head of the Ministry of Finance. FHC's performance was a milestone in the history of our country. He was one of those responsible for launching the FlatReal, the economic plan that managed to stabilize the Brazilian economy.
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Real plan
The Real Plan is a separate chapter from the government of Itamar Franco and the legacy most important of this period for Brazil. As mentioned, in mid-1993, Itamar Franco invited FHC to take over the Ministry of Finance, giving him the freedom to make the necessary changes to change the country's economy.
FHC joined economists who had acted and failed during the Sarney government in the Cruzado Plan. Among them were Pérsio Arida and Edmar Bacha, for example, and the measures defined by FHC's team did not include shock strategies, but sought to open the debate to the population. Thus, the measures taken by the Plano Real were open to the population and everything explained in detail so that the population could support and adhere to the plan.
The Real Plan was implemented between 1993 and 1994 and its implementation required political approval by the legislature. Although today the majority opinion is that the plan was successful, at the time, there was a lot of suspicion about whether the plan was harmful or not to the poorest. The implementation of the Real Plan took place in three stages:
1st phase: stabilization of public accounts;
2nd phase: launch of a virtual currency, the Real Value Unit, which would make the transition from the Cruzeiro Real to the new currency, the Real;
3rd phase: launch of the real.
The Real Plan included reducing government spending and raising funds through the privatization state-owned companies. There were fears that Itamar Franco would intervene in the process, but he ended up not intervening – despite the success of the plan, the privatizations of some companies are currently criticized by economists.
There was an increase in taxes, the prices of goods were indexed to the dollar, to guarantee stability and avoid successive increases, there was economic opening and encouragement to import, reforms banking etc. In the end, the Plano Real was a success because it managed to drastically reduce inflation in Brazil. The plan, however, had its problems and contributed to the increase in unemployment, in addition to having kept the purchasing power of the poorest leveled at the bottom.
The alliance between Itamar Franco and FHC was extended to the election and, in 1994, the PSDB politician was launched into the presidential race with the support of Itamar Franco and was elected as president of Brazil still in the first round.
Image credits
[1] federal Senate
[2] FGV/CPDOC
Grades
|1| MOTTA, Marly. Stabilization and stability: from the Real Plan to the FHC administrations (1993-2002). In.: FERREIRA, Jorge and DELGADO, Lucilia de Almeida Neves (eds.). Republican Brazil: the time of the New Republic – from the democratic transition to the 2016 political crisis. Rio de Janeiro: Brazilian Civilization, 2018, p. 222.
|2| SCHWARCZ, Lilia Moritz and STARLING, Heloísa Murgel. Brazil: A Biography. São Paulo: Companhia das Letras, 2015, p. 496.
|3| Idem, p. 496.
By Daniel Neves
History teacher
Source: Brazil School - https://brasilescola.uol.com.br/historiab/governo-itamar-franco.htm
