By Marcela Ayres, Bernardo Caram and Lisandra Paraguassu

BRASILIA (Reuters) – Leading economists in and around Brazil’s Workers Party are nearly united in scorn for a new law shielding the central bank from presidential influence – but there is an important voice of dissent in the party: ex-President Luiz Inacio Lula da Silva.

    As Lula gears up for his presidential campaign this year, he has pointedly avoided naming a spokesman for economic proposals. That has made clear that Lula alone is the deciding voice on his economic agenda – and he has shown no qualms seeking common ground with centrists, even where it breaks with his left-wing party’s consensus.

    The early signs of moderation from the front-runner in this year’s election have turned some investors bullish on Brazil, helping to draw nearly $10 billion in foreign flows to local markets and boosting the country’s currency and stocks.

    In interviews with a half dozen economists and ex-ministers advising Lula or his party’s policy think tank, all made clear that they did not speak on the former president’s behalf.

    Nowhere was that clearer than in their criticism of a law passed last year to formalize the central bank’s autonomy by giving its governor a term straddling presidential elections and removing the role from the government cabinet.

    Five of the six economists interviewed by Reuters disparaged the law, warning that it tied the president’s hands on macroeconomic policy. Lula, himself, had criticised the idea last year but he’s since downplayed any concerns.

    “People take issue with the so-called independent central bank. “Look, this central bank must be committed to Brazil and not to me,” Lula said to journalists last month. He also indicated that he is open to constructive dialogue with current president of the central bank. I see no obstacles, just differences in opinion.”

    Two other political advisors to Lula, speaking on condition of anonymity, ruled out any efforts to change the central bank law if Lula wins the October election, which polls show him carrying by a healthy margin.

    Elsewhere, the consensus among advisors to Lula and the Workers Party has lined up more clearly with the economic agenda he has previewed publicly. The consensus was reached on the loosening of fiscal regulations to permit expansions in public investments, social programs, and other ‘green’ initiatives. It also ruled out major privatizations that were proposed by President Jair Bolsonaro.

DOUBTERS, ‘DEVELOPMENTALIST’

Yet, Brazil’s left-leaning economists remain wary of giving up government control over the monetary policy.

Pedro Rossi is a member of Perseu Abramo Foundation, a think tank founded by the Workers Party, and a professor at State University of Campinas, a hotbed of the PT’s “developmentalist” school of state-led economic policies. He said that the central bank should follow the lead of the president.

Esther Dweck is an economist at the Federal University of Rio de Janeiro. She was also the former budget secretary for the most recent PT government.

Luiz Gonzago Belluzzo is an economist at Unicamp who advised Lula over many decades. He argued that government policies should allow the use of $360 billion worth foreign reserves by the central bank to stabilize the country’s exchange rate.

He was critical of Guido Mantega who, as a former Finance Minister, engaged in “currency warfare” under Lula, his PT successor Dilma Raousseff. This included fighting against an exchange rate he believed to be too high.

Mantega stated to Reuters that Brazil’s current central bank had a hands-off attitude to Brazil’s currency markets, which has led to excess depreciation and contributed to double-digit inflation.

A mandate was included in the law last year establishing autonomy for central banks to maintain economic growth and promote full employment. Eduardo Moreira (founder of Brasil Plural, an asset manager who advised Lula in economics), argued that the new independent central bank hadn’t changed its communication or policy to meet this mandate.

Nelson Barbosa was a Professor at the Getulio Vargas Foundation, who also served as Finance Minister under Rousseff.

He said, “I don’t believe it will be an issue with the eventual return to Lula.”