Reuters/Brasilia

When he became finance minister 10 months ago, Joaquim Levy was an uncomfortable fit in Brazil’s left-leaning government - an orthodox, University of Chicago-trained economist, a fiscal hawk with an affinity for cutting spending.
Dogged by speculation over his departure amid vocal opposition from the ruling Workers’ Party, Levy and his boss President Dilma Rousseff have told officials and lawmakers he is staying to see an unpopular fiscal austerity plan get through Congress, according to sources in the government and party.
After that, he may be gone, either because he is pushed out or leaves on his own volition, they say. But the mission he was hired for by Rousseff - to help restore Brazil’s credibility with investors and fix past mistakes - will be at least partially fulfilled.
“It will be too costly for Levy to leave now,” said a senior Workers’ Party lawmaker who has spoken with Levy and Rousseff about the minister’s situation. “He will try to pass most of the package and very likely leave after that next year. He is very frustrated and under a lot of pressure.”
Levy, who was compelled to publicly state that he was not quitting, declined to comment for this article.
Rousseff believes that firing Levy now could deepen what is expected to be Brazil’s longest recession since the 1930s and would scare off some investors who see him as the only credible figure in her economic team, a presidential aide said.
“Levy doesn’t want to leave and Rousseff doesn’t want to fire him now,” said the aide, who asked for anonymity to speak freely. “But the constant speculation around his resignation and friendly fire from within the party make the situation increasingly unsustainable.”
One Workers Party insider suggests that the party leadership can hold its nose just long enough for that plan to be approved in Congress some time next year.
“Levy proposed an adjustment plan and he needs to lead that to its completion,” said Jose Mentor, a veteran party lawmaker. “After that, we will decide what to do.”
Levy has sought to reduce the government deficit with cuts in spending and social benefits while raising taxes. It has not been enough to generate budget savings due to resistance to his plan in Congress, prompting Standard & Poor’s to strip Brazil of its prized investment-grade credit rating. Other rating agencies threaten to follow suit if the accounts do not improve.
The fiscal austerity plan still requires congressional approval of additional measures next year, including Levy’s proposal to revive a hated tax on financial transactions called the CPMF to make up for falling revenues.
The question is: can Levy, 54, withstand the pressure that long?
After party leaders spoke publicly about the need to replace him a few weeks ago, saying he had an “expiry date,” Levy complained privately to Rousseff, according to the presidential aide.