Moraes suspends government and Congress decrees in the IOF case

Minister Alexandre de Moraes , of the Federal Supreme Court, suspended this Friday 4th the effects of the Executive and Legislative decrees that dealt with the increase and the cancellation of the readjustment of the IOF rates.

Moraes also scheduled a conciliation hearing for July 15th, with the presence of representatives of the Presidency of the Republic, the Senate and the Chamber, the Attorney General's Office, as well as the authors of the three actions that contested the decrees: PSOL, PL and the AGU itself.

“There are strong arguments that indicate the existence of reasonableness in the immediate suspension of the effectiveness of the contested decrees, including because this undesirable clash between the measures of the Executive and Legislative branches, with successive and repeated antagonistic statements, strongly contradicts article 2 of the Federal Constitution which, more than determining the independence of the Powers, requires harmony between them, as a basic and inalienable principle of our Democratic State of Law in search of the common good for all Brazilian Society”, Moraes noted in the dispatch.

Moraes also ordered the government to present a justification for the IOF increase within five days. The same order applies to the National Congress, which overturned the measure.

“It is clear that both the presidential decrees, due to serious and well-founded doubts about a possible deviation from the purpose of their issuance, and the legislative decree, due to it being an autonomous presidential decree, appear to distance themselves from the constitutional assumptions required for both types of regulations,” he wrote.

The decision was made after the Attorney General's Office filed a lawsuit with the Supreme Court against the overturning of Lula's (PT) decree on the IOF, which provoked a strong reaction in Congress. The opposition accused the government of affronting the Legislative Branch, while the allied base defended the technical and constitutional nature of the measure. Now, with the suspension of both decrees and the attempt at conciliation scheduled, the Supreme Court seeks to avoid the worsening of the institutional crisis between the Powers.

In his X account, the president of the Chamber of Deputies, Hugo Motta (Republicans-PB), said that Moraes' decision "avoids the increase of the IOF in line with the desire of the majority of the plenary of the Chamber of Deputies and of society". "We remain open to institutional dialogue, with respect and serenity, always seeking the balance of public accounts and sustainable growth of the economy", he said.

The Attorney General of the Union, Jorge Messias, said that Moraes' decision highlights the "need to clarify the doubt raised by the National Congress about a possible deviation from the purpose of presidential decrees, especially due to the fiscal nature of the measures."

“The AGU reaffirms its loyal and dedicated commitment to the conciliatory process, highlighting that the democratic principle and, in particular, the separation of powers, emerges as the true winner at this time,” he concluded.