Mello is leading candidate to head Brazil's economic policy secretariat -sources

Guilherme Mello is seen as the leading candidate to head Brazil's Secretariat for Economic Policy in the country's incoming leftist administration, two sources familiar with the matter said, as future Finance Minister Fernando Haddad moves ahead with building his team. Mello's potential nomination is unlikely to calm investors, who have been jittery about President-elect Luiz Inacio Lula da Silva's economic plans as he seeks Congress approval for a multibillion-dollar social spending package.

Guilherme Mello is seen as the leading candidate to head Brazil's Secretariat for Economic Policy in the country's incoming leftist administration, two sources familiar with the matter said, as future Finance Minister Fernando Haddad moves ahead with building his team.

Mello's potential nomination is unlikely to calm investors, who have been jittery about President-elect Luiz Inacio Lula da Silva's economic plans as he seeks Congress approval for a multibillion-dollar social spending package. Mello is an economics professor at Unicamp, considered a center of heterodox economic thought, and a main adviser to Lula's Workers Party (PT), having helped in building the president-elect's economic program ahead of this year's election.

He is a critic of Brazil's constitutional spending cap and backs a new fiscal framework. In past interviews, Mello mentioned models such as primary balance targets, debt limit or even restricting public spending. One of the sources said Haddad has been prioritizing people he has previously worked with to form his team.

That is also seen lowering chances that Felipe Salto, currently heading the Sao Paulo state's Finance Secretariat, could be appointed as Treasury secretary, the source added. The incoming minister is expected to finish nominating his team by early next week, after announcing former Banco Fator Chief Executive Gabriel Galipolo as executive secretary and Bernard Appy as special secretary for tax reform.

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