MercoPress. South Atlantic News Agency

Lula da Silva hails Brazil's solid financial position

Pte. Lula da Silva

The days when emerging economies were depended on the International Monetary Fund, IMF “are over” and so are over the days when Latinamerica had no voice in international affairs, said Brazilian president Lula da Silva in Spain.

"The story that free markets fix it all is over", he added in an interview with the Spanish daily El Pais. The Brazilian president in Spain to be honoured with the Don Quijote Prize for the promotion of Spanish language added he was convinced that the current financial crisis would open the way for deep changes in global finances and world balances. Lula da Silva said that Brazil is gradually becoming an emerging regional and global power and emphasized he was convinced that free trade "was the best antidote for the current crisis". "From Spain I'm leaving for India to talk with Prime Minister Manmohan Singh about the Doha round on free trade, which is paralyzed basically because of a disagreement between United States and India over agriculture", said Lula da Silva. "I'm going to tell my good friend Singh that there could be no better or more positive gesture to begin to overcome the current financial crisis than to conclude the Doha round", he underlined. The Brazilian president insisted that the Doha round is not an economic problem, "it's political". Before leaving for India and after having been honoured in Toledo together with the Mexican writer Carlos Fuentes, Lula da Silva said that Brazil was ready to use foreign reserves and buy bank shares if necessary to defend its financial system. He recalled Brazil has over 230 billion US dollars in reserves it can draw on and is in a stronger position to fight the international financial crisis than any of the world's large economies, insisted Lula da Silva. "All of this is money we can use, in the event it was necessary; we are prepared to free up some resources in our reserves, so as long as they pay us with bonds, so that reserves are maintained". Lula da Silva said resources would principally be for Brazilian banks that operate abroad. Asked if Brazil's government was prepared to buy bank shares, the president said it would depend on the situation. "If there was a bank in a position that we considered that it was necessary, first we would get another bank to buy their portfolio, like Bank of Brazil already bought three. And it has the ability to buy more" said Lula da Silva. "Second, if it was necessary the government would lend money to the central bank as a lender of last resort. What I think is that we should remain alert." "Of all the big countries, BRICs and developed, that which faces the least risk is Brazil" he underlined.