MercoPress. South Atlantic News Agency

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Headlines:
Nitro-glycerine in flight arriving to Montevideo;
Fearing inflation Brazil basic rate surges to 18,75%;
Argentina and Vatican on collision course.

Nitro-glycerine in flight arriving to Montevideo

Uruguayan Customs authorities discovered this week two 20-kilogram (44-pound) containers with nitro-glycerine on a plane arriving at Montevideo's airport from Miami, Florida, reports the local press. The containers arrived in Uruguay on a LanChile flight last Sunday in the same cargo dispatch with computer equipment forwarded to a Uruguayan computer assembly plant. The explosives were removed by special Army Explosives Unit who which was alerted by airport police. The substance is being analyzed by military munitions experts. Importers of the computer equipment said the nitro-glycerine mix product is used to deactivate any danger of fire to the computer components. The news was only made public this Saturday.

Fearing inflation Brazil basic rate surges to 18,75%

Brazil's central bank raised this week the benchmark interest rate for the sixth time since September as economic growth and higher government spending fuel concerns about inflation. The central bank's nine-member board headed by President Henrique Meirelles lifted the overnight rate by half a percentage point to a 14-month high of 18.75%. The increase, in spite of protests from local industry and companies linked to domestic demand, indicate that central bankers are concerned about the perception that inflation rate isn't falling to its 5.1% goal for this year. President Luiz Inacio Lula da Silva's decision to raise the minimum wage 15% this year and boost salaries for judges, attorneys and prosecutors is adding to that perception among investors, reported Sao Paulo market analysts. ''What you have is a basic mismatch between fiscal and monetary policy,'' Sergio Werlang, a former central bank chief economist who now is a managing director at Banco Itau Holding Financeira SA, Brazil's biggest bank by market value, said in Sao Paulo. ''Government expenditures went up quite dramatically.'' The higher interest rates outlook pushed up Brazil's currency to a 32-month high last February 14. The annual inflation rate fell to 7.4% in January from 7.6% in December, and the annual rate is down from a seven- year high of 17.2% in May 2003

Argentina and Vatican on collision course.

The Vatican warned Argentina that it runs the risk of having abused "religious freedom", following President Nestor Kirchner's decision to sack an Army bishop for saying the Health Minister should be "drowned in the sea" for supporting abortion. President Kirchner signed this week a decree ceasing Antonio Baseotto as Bishop of Argentina's Armed Forces. In an unusual action the Vatican's spokesperson, Joaquin Navarro-Valls condemned President Kirchner's decision before receiving an official confirmation from Buenos Aires. "If the pastoral ministry of a bishop, legitimately named by the Holy See is prevented, we are facing an abuse of religious freedom", said Mr. Navarro-Valls in an official release. The public controversy, almost a scandal, was triggered by a letter made public, sent by Bishop Baseotto to Argentina's Public Health minister Gines Gonzalez García who defended in a newspaper interview the legalization of abortion, which is illegal and punishable in the country. Bishop Baseotto described the minister's stance as an "apologist for murder" and quoting a passage from the New Testament added that Mr. Gonzalez Garcia deserved to have a millstone hung from his neck and should be "thrown to the sea". However the Argentine government said the statement evoked the country's controversial recent past when under the military regime that ruled from 1976 to 1983, political opponents were thrown into the sea during the so called "death flights". The Bishop holds his post because of a 2002 agreement between Argentina and the Vatican. Technically only the Vatican can sack the bishop. The presidential decree annulled the agreement meaning the government withdrew its support for the bishop and his salary. But the move follows the Vatican's decision to ratify the bishop in his position. President Kirchner has made human rights one of the main pillars of its administration and references to the atrocities committed during the "lead years" are frequent.