FACTBOX | Who could Brazil’s Lula pick for finance minister?

A sharp selloff in Brazilian markets on Monday after leftist president Luiz Inácio Lula da Silva’s surprise re-election is pressuring the veteran leader to pick a finance minister who can send a signal of fiscal discipline and reassure markets.

Sources say Lula is likely to take his time. But three sources who spoke on condition of anonymity said two key names have emerged: vice-president Geraldo Alckmin and Rafael Fonteles, the re-elected governor of Piauí state who revitalised Lula’s flagging campaign after trailing in the first round to right-wing senator Flavio Bolsonaro.

Mathematician Fonteles, 41, is seen as a fiscally disciplined technocrat who could bridge the gap between Lula’s administration and wary investors.

He holds a master’s degree in mathematical economics and served as Piauí’s finance secretary from 2015 to 2022. He also completed two terms as head of Comsefaz, which represents state finance secretaries.

Alckmin, 73, comes from the Brazilian Socialist Party and was once the president’s centre-right rival who lost to Lula in the 2006 presidential election. He is also a former two-term governor of São Paulo and ex-trade and development minister.

Reuters reported earlier this month that Lula was weighing Alckmin as finance minister to bolster his fiscal credibility and win over centrist voters.

Fonteles gained prominence in Lula’s campaign after a shakeup that followed Lula’s first-round finish behind Bolsonaro.

A member of Lula’s Workers’ Party (PT), he is a close ally of Lula’s former education minister and senator-elect Camilo Santana. The two worked together on Lula’s campaign in Brazil’s northeast, where the president secured a commanding lead.

In his victory speech, Lula thanked Fonteles for his role in the campaign but noted that the governor still had a “mission to fulfil in Piauí”, which some allies read as a sign he may be reluctant to bring him into the cabinet so soon.

In his victory speech, Lula lavished praise on Alckmin’s loyalty and even handed him the microphone before speaking himself. Lula wants a finance minister he trusts completely, one of the sources said. Alckmin is someone Lula trusts “100%,” another source noted.

“There are very few people outside the PT who have that kind of relationship with Lula today,” one of the sources said.

Lula, however, may ultimately decide to retain current finance minister Dario Durigan, said the sources.

While Durigan lacks the political weight of some rivals, Lula is said to value him highly and view him as an “effective operator”, according to a fourth source.

The three sources said Lula’s choice of finance minister has become increasingly intertwined with whether Lula makes former finance minister Fernando Haddad his chief of staff.

Haddad, a member of the PT, left the finance ministry earlier this year to run for governor of São Paulo at Lula’s request — despite polls pointing to a likely defeat — to bolster the president’s base in Brazil’s most populous state. He lost.

Both Durigan and Alckmin, who are from outside the PT, are seen as having close ties to Haddad, which would also help ensure alignment between the finance ministry and the presidential palace.

Two sources also said that Lula understands that, given current market conditions, a PT figure alone would struggle to curb the slide in the Brazilian real or the surge in long-dated interest rate futures. This could boost Durigan and Alckmin’s chances of being finance minister if Haddad is chief of staff.