Brazil President Steps Up International Offensive Meeting Obama & Cameron

Presidents Rousseff and Obama The president of Brazil, Dilma Rousseff, is scheduled to meet with her US peer Barack Obama next week in the framework of the annual opening of the UN General Assembly and at the end of the month will be hosting British PM David Cameron in Brasília.

Rousseff and Obama will most probably advance on an “inconclusive” bilateral agenda next Tuesday in New York, said Folha de S. Paulo, quoting Brazilian diplomatic sources who added the meeting is on request from the US State Department.

Brazil’s Executive has yet to confirm President Rousseff’s agenda next week in New York.

The presidents have already held two summits: the first March 2011 in Brasília and the second last April in Washington, which according to diplomatic sources helped to overcome the distancing between Washington and Brazil when former president Lula da Silva got involved with Iran and established closer links with Teheran including receiving Mahmoud Ahmadinejad in Brasília.

President Rousseff is also scheduled to receive Mexican elected president Enrique Peña Nieto at the Planalto Palace. The number one and two Latinamerican economies have good political relations but also significant trade differences.

Following the round of meetings in New York and her speech before the UN General Assembly, President Rousseff is scheduled to receive in Brasília PM David Cameron next 27 September and a day later the recently elected Egyptian president Mohamed Morsi.

EU Crisis

Brazilian finance minister Guido Mantega said that resolving Europe’s economic problems are likely to drag out over coming years due to a complex and slow process of decision-making in the region and recommended emerging economies to promote domestic consumption and trade among them.

“There is not solution to the EU crisis in the short term”, said Mantega following a meeting in Paris with his peer Pierre Moscovici and top executives from French companies interested in investing in Brazil.

Mantega who on Thursday will be in London said that the measures agreed in the EU “remain on paper” because of clashing interests of the leading countries of the Euro zone which “delays everything to eternity”.

France supports and is interested in the implementation of those measures, “particularly a greater involvement of the Euro Central bank in buying debt from countries in difficulties, but we all know, I won’t give names, some countries have political problems and continue delaying putting them into action”.

“And there will be no solution to the European crisis as long as these urgent problems are not solved in the short term. As long as countries and banks are at risk, economies will continue to be imperiled”, forecasted the Brazilian minister.

This means that emerging countries have to organize to address the situation since they can’t count with the recovery of the European market “since it will remain stagnant for three, four years”.

Mantega said that those countries with a model based on exports such as China, which depend more on foreign than domestic markets, will have to find a substitute for the EU market. This means emerging countries and promoting domestic demand.

The minister added that creating jobs is one of the main challenges for the US and the EU, contrary to Brazil which has “solid foundations” although admitting that the quality of labor, as was pointed out to him by French business people, “is an obstacle for the development of the country”.

But on the bright side Mantega mentioned Brazil’s budget deficit below 2% of GDP; ample margin to reduce costs plus tax breaks and different direct stimuli as the infrastructure and public works program, plus a domestic market which does not cease to expand and with direct impact on jobs.

Mantega revealed that in the next few years Brazil expects anywhere from 30 to 40 million Brazilians to climb out of poverty, which will help make the country, with a population of 190 million, the world’s fifth largest market.

Finally tuning down his strong criticism of the US Federal Reserve latest stimuli measures, Mantega said that monetary decisions are not enough: the US needs fiscal measures, since otherwise “the devaluation of the dollar ends hurting the currencies of emerging countries”.

“Monetary stimuli instead of going to production end in the financial sector, particularly Wall Street and the emerging countries, which in turn can’t prevent revaluation of their currencies which erodes competitiveness”.

Mantega said whoever wins the US presidential election in November “will have to apply fiscal policies to make the economy grow, plus cleaning up the housing market and stimulating consumption. The monetary strategy applied so far is rapidly losing efficacy”.

US Stimuli

The latest round of US quantitative easing will create many problems for emerging countries and Brazil will take action to keep the real from rising in value, said Brazilian Finance Minister Guido Mantega.
Speaking to journalists after a meeting in Paris with his French counterpart Pierre Moscovici, Mantega voiced concerns that further monetary stimulus would lower the value of the dollar and in turn hurt Brazilian competitiveness in export markets.

“I don’t think that the new monetary easing will solve many problems for the United States, but it will cause a lot of problems for emerging countries,” Mantega told journalists.

Launching a third round of monetary easing, the US Federal Reserve pledged earlier this month to buy 40 billion dollars of mortgage-backed securities each month in a move aimed at bringing down interest rates.

Brazil has been one of the fiercest critics of US Federal Reserve easing and is fighting to keep capital from flowing from low-yielding dollar assets into the Brazilian currency real with foreign exchange market interventions as part of what it calls a “currency war”.

Brazilian President last March said advanced economies were unleashing a “monetary tsunami” that adversely impacts on emerging markets’ currencies and trade balances.

“We will continue to take measures to keep a devalued real,” he said, declining to say how low Brazil would keep the currency.

Moscovici said that he understood Brazil’s concerns but added that currency tensions should be dealt with in international institutions and the Group of 20.

Mantega said that dollar weakness caused by the Fed’s easing not only hurt Brazil’s exports but that it reduced the value of the country’s dollar reserves. He added that “if Washington wanted to help revive the US housing market it would be better to focus on fiscal rather than monetary policy”. 



You May Also Like

In Competitiveness Brazil Gets an F

Brazil is 39th in international competitiveness, according to the Competitiveness Indicator (IC) calculated by ...

That Lady on the Money

In the 112 years since the Proclamation of the Republic, Brazil has had scores ...

For One Whole Month Brazil Becomes the World’s Movie Central

The 30th Mostra International Film Festival in São Paulo Brazil, opened last night, October ...

Cargo Movement in Brazil’s Rio Grande Port Up 23%

Rio Grande do Sul's Rio Grande Port, in Brazil's South, saw the highest throughput ...

Brazil’s Steel Production Falls 4%, But Export Revenues Grow 26%

The Brazilian ironworks industry should have 26.4% greater export revenues in 2005 than in ...

Brazil to Give Small Businesses Up to US$ 1,900 Loans

Brazilian President Luiz Inácio Lula da Silva approved, today, a Provisional Measure (MP) creating ...


Investments into Brazil economy should reach $15 billion this year, almost as much as ...

Brazil-Paraguay Summit Cannot Break Impasse Over Itaipu Hydroelectric

They could not reach agreement on proposed renegotiation of accords related to the Itaipu ...

Hurting the Amazon

Currently, there are 165,000 square kilometers of cleared and abandoned lands in the Amazon, ...

WordPress database error: [Table './brazzil3_live/wp_wfHits' is marked as crashed and last (automatic?) repair failed]