Lula Tells IMF, Brazil Can Now Walk on Its Own Legs

President Luiz Inácio Lula da Silva met with the managing director of the International Monetary Fund, Rodrigo de Rato, to celebrate the anticipation of a debt payment by Brazil.

The country liquidated its US$ 15.5 billion debt with the IMF two years ahead of time in December. All the members of the government’s economic team were present at the ceremony, along with other cabinet members.

According to Lula, Brazil was showing its economic independence. "A country is independent only when it walks on its own legs and grows with its own resources," he said.

Lula said the moment is a special one because Brazil is showing the fund that it is on track to solid economic stability. "Like our economy, our democracy is solid and dynamic. And both reflect the maturity of the Brazilian people," said the President.

For the President Brazil’s liquidation of its debt to the International Monetary Fund (IMF) does not terminate the country’s relations with the Fund.

"To the contrary, our relationship assumes a different level and quality," he observed at a meeting to commemorate the country’s having paid off its US$ 15.57 billion debt in advance, on December 27, 2005.

Lula also emphasized that, although Brazil is "taking note of and even celebrating" having repaid the IMF ahead of time, it should not be forgotten that "moments like this do not mean room for a pause or rest."

As part of the process that made it possible to liquidate the debt, the president underscored changes in the country’s infrastructure, such as the creation of a "more favorable" business atmosphere and simplification of the tax structure, making it "more efficient."

At the close of the ceremony, Lula told the director-general of the IMF, Rodrigo de Rato: "You can be sure that Brazil has finally and definitely discovered its path."

Brazil was supposed to pay the US$ 15.5 billion it owed the IMF in installments until December 2007, but decided to anticipate the payment and economize some US$ 900 million in interest payments.

Meanwhile, minister of Finance, Antonio Palocci, confirmed that Brazil will also anticipate a debt payment of US$ 2.6 billion to the Paris Club.

Agência Brasil

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