MercoPress. South Atlantic News Agency

“In spite of political turbulence?the economy is expanding”

Brazilian president Luiz Inacio Lula da Silva underlined Monday the stability and growth of the Brazilian economy in spite of the political turbulence generated by the constant claims of corruption at government level and in Congress.

"We're going through a good moment for the economy. In spite of political turbulence?the economy is expanding", said Lula da Silva during his radio program, "Having coffee with the President".

"The Brazilian society is well aware that the economy must deliver good results, because with good results we're going to have good news for the 186 million Brazilians", he stressed adding that inflation was under control "and even more important, employment is increasing".

President Lula da Silva also mentioned his administration's social programs with direct subsidies (of 7 to 42 US dollars) to the poor and indigent, which helps them become consumers, "they spend the money, they buy food, clothing?"

Last week the Brazilian Central Bank revealed that the economy had expanded at an annual rate of 3,9% in the second quarter, following the 2,8% of the first quarter. Furthermore, in spite of reiterated complaints from industry and retailers about interest rates, currently the basic Selic stands at 19,75%, inflation has been brought down to an annualized 5,3%, which is closer to the government's target of 5,1%.

Another good showing is unemployment which has been sliding since August 2004 from 11,4% with the latest available data for July indicating 9,4%.

However the positive economic news is not enough to overshadow the ever growing problems in daily politics.

Besides the corruption allegations involving leading members of the ruling Workers Party and close aides of the President, which haven't ceased since last June, this weekend Brazil's three main weeklies revealed a system of bribes inside Congress dependencies benefiting the president of the Lower House Serverino Cavalcanti from the small Progressive Party, and a close ally of the Lula da Silva administration.

According to the claims Mr. Cavalcanti receives a monthly payment of 4.500 US dollars in exchange for automatically renewing the annual contract of the company licenced to run the Congress restaurant. Veteran Congressman Cavalcanti vigorously denies the allegations and has ordered an administrative investigation into all Congress contracts.

However the main opposition parties have demanded Mr. Cavalcanti resign to his post as Lower House president, until the investigations conclude.

"The president has lost all political and moral conditions to preside over the House", said the Brazilian Social Democracy Party which together with the Liberal Front, the Popular Socialist and the Green Party make up 131 of the 513 House's seats.

Opposition parties are also furious with Mr. Cavalcanti for having suggested last week that the 18 Congress members allegedly involved in corruption related acts, all of them from the ruling coalition, should be "punished mildly".

"His whole attitude only merits his resignation", said Fernando Gabeira, a Green Party representative.