Keeping the Faith
The international financial markets have warmed to
Brazilian President-elect Lula's statement-like pronouncements. But he must impose unpopular austerity measures to keep investors satisfied.
It seems almost too good to be true. Brazil's
President-elect Luiz Inácio Lula da Silva seems to have
transformed himself from left-wing agitator to statesman before
he has even taken office. Elected in a landslide in October,
the former lathe operator, union organizer and founder of the
Workers Party (PT) is sounding more like the voice of reason
with every day that passes. He has vowed to honor the
government's crushing debt of $230 billion when he takes office
on January 1. He has rejected demands for a big rise in the
minimum wage, which would trigger increased pension payments
and civil service salaries. Lula and his transition team say
they will deliver a primary budget surplus - before interest
payments - to stabilize the debt and comply with a $30 billion
loan program agreed with the International Monetary Fund in
September. Financial markets heaved a collective sigh...
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