Itamar PMDB — Plano Real birth under FHC Finance

Doctrine — stated goals and content

Transitional PMDB government whose defining act was handing the Finance Ministry to FHC, whose team designed and launched the Plano Real — ending Brazil's 30-year high-inflation era. Four doctrinal pillars: (a) Plano Real design — Unidade Real de Valor (URV) introduced March 1994 as a parallel unit of account indexed to the dollar; prices progressively re-denominated in URV; on 1 July 1994 URV converted to the new real at 1 URV = 1 real = $1, with cruzeiro real retired at 2,750:1. Monthly inflation fell from 50% (June 1994) to ~2% (December 1994). (b) Programa de Ação Imediata (PAI, May 1993) — fiscal prerequisites: Fundo Social de Emergência (FSE) de-earmarked 20% of federal revenue from the 1988 Constitution's rigidities (1994). (c) Privatisation deepening — CSN (steel, April 1993), Embraer (December 1994), petrochemicals continuation under the PND inherited from Collor. (d) Constitutional renegotiation groundwork — the revision window under the 1988 Constitution Article 3 of the ADCT opened October 1993 but produced few amendments beyond the FSE. Stated school: Washington-Consensus-compatible stabilisation via novel de-indexation mechanism; PUC-Rio monetarist-structuralist synthesis. Left-right: centre to centre-right economic; Itamar himself populist-nationalist but deferred to FHC team. Popularity: Itamar inherited ~30% approval at the Collor transition; rose to ~45-50% post-Plano Real; Plano Real success catapulted FHC to win October 1994 presidential election first-round 54.3% vs Lula 27%, and gave FHC a governing mandate that Itamar himself could not convert. Coherence: trade PMDB patronage politics and Itamar's populist instincts for a technocratic stabilisation team that delivered the decade's single most consequential Brazilian policy — ending hyperinflation.