MercoPress. South Atlantic News Agency

Hot News from Argentina & Brazil.

Headlines: Argentina rejects war on Iraq; Brazil hikes interest rate; Pro Mercosur Ambassador.

Argentina rejects war on Iraq

Argentine Foreign Affairs Secretary Carlos Ruckauf said "Argentina will not participate in any unilateral war or in a war blessed by the United Nations Security Council", but if Iraq is bombed the country will help with "humanitarian aid". Mr. Ruckauf speaking to the press in Government House (Casa Rosada) insisted "Argentina will not be sending soldiers to fight a war in Iraq because we're against the Iraqi people having to suffer besides a dictator, a war", indicated Mr. Ruckauf adding that Argentina rejects the Iraqi dictator because he's involved in genocide, "but we're against bombing civilians". The Argentine Foreign Secretary went on to demand market access for Argentina's produce and anticipated that with other Latinamerican nations "we're going to claim damages caused by industrialized countries protectionist policies". "When Latinamerican and African countries are barred from access to industrialized countries markets this generates more misery; misery from where terrorism recruits", underlined Mr. Ruckauf.

Brazil hikes interest rate

Facing mounting speculation over a possible armed conflict in the Persian Gulf and growing concerns about inflation, Brazil's Central Bank hiked the basic interest rate for the fifth consecutive month. In the second meeting of the Monetary Policy Committee since Central Bank president Henrique Meirelles took office the Selic reference rate was increased to 26,5% from 25,5%. The Brazilian Central Bank further tightened monetary policy by demanding banks to augment cash reserve requirements for deposit accounts from 45% to 60%. The decisions followed President Luiz Inacio Lula da Silva administration's announcement that it was naming three new members to the Board of Directors of the Central Bank. Both the outgoing and incoming members, pending Senate approval, are professional and respected bankers that caused no alarm in the Brazilian financial system. Since taking office the Lula da Silva administration has targeted keeping inflation under control and revaluing the Brazilian currency since most of the country's debt is indexed to the US dollar. Orthodox Finance Minister Antonio Palocci has repeatedly said that bringing down the debt to GDP ratio, currently above 65%, is his main objective, even if this means postponing the resurgence of economic expansion "for one or even two years".

Pro Mercosur Ambassador

Argentina's new Ambassador in Brazil openly supports strengthening Mercosur and is critical of the policy of "automatic alignment" with United States. Mr. Victorio José Taccetti is a career diplomat who has held several Deputy Secretary positions in the Argentine Foreign Affairs Ministry plus important jobs overseas in the embassy in Washington and six years as ambassador in Mexico (1994/99). He's currently chief Minister of the Foreign Affairs cabinet. When asked about his coming job in Brasilia where he expects to arrive next April Mr. Taccetti said that his objectives are "strengthening Mercosur, consolidating the common external tariff and the creation of a monetary institute as the first step towards a common currency for the block". Other areas include the coordination of social policies in Argentina and Brazil, (Heads of Family aid and Zero Hunger programs) and lobbying the Brazilian Congress to approve the recently free movement and residence of Mercosur citizens in member countries.