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Rousseff pledges to prop the economy but with no EU-style austerity measures

Friday, July 13th 2012 - 23:46 UTC
Full article 13 comments

Brazil will not adopt EU-style austerity measures to tackle its economic crisis and will instead cut taxes and maintain social programs, President Dilma Rousseff said on Friday. Read full article

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  • Forgetit86

    Her deeds and words are in flagrant contradiction. She has consistently cut the budget for both productive investment and essential social services such as education. Only unproductive expenditure and flagship welfare programs haven't been touched. Her only measures to stimulate the economy are to cut taxes and attract speculative capital whilst preventing SOEs from investing in new projects. In rhetoric she styles herself as some kind of left-wing, bizarro-world Thatcher but her policies are the most right-wing in a decade.

    Jul 14th, 2012 - 12:55 am - Link - Report abuse 0
  • British_Kirchnerist

    #1 Interesting, I don't know about that but as a European I do think every bit of criticism for my own elite's incredibly stupid anti-poor policies helps. Do you think Cristina, who Dilma was sounding like here, is a better anti-austerity leader?

    Jul 14th, 2012 - 08:44 am - Link - Report abuse 0
  • Max

    Vila Velha / Espirito Santo

    Jul 14th, 2012 - 09:52 am - Link - Report abuse 0
  • MarkWhelan

    Dilma will try to save the economy of Brasil but at present she is failing.
    She will promote her welfare programmes but will neglect medical and eudcation programmes.
    She says that she will not cut Govt. expenses, how?
    Maybe the same way that she ,and her Govt., is treating the Federal University Professors.
    She, and her Govt., refuse to go into Negotiation with the University Professors about Career Pathway Rationalization and a modest pay increase.
    The professors have been on strike since May and still the Govt. refuses to go into any form of discussion with them.

    Jul 14th, 2012 - 02:14 pm - Link - Report abuse 0
  • Forgetit86

    #2
    I'm not very knowledgeable of CFK's policies, but I do think she and Dilma are different. Dilma feels the need to appease to the orthodox establishment -- it's part of the 'pragmatic', “rational leftist” image that the administration has cultivated since the Lula years. The increase in the basic interest rate and the huge budget cuts of last year, which ultimately soured the economy, were no doubt a response to the financial markets' concerns, expressed in shill tone on specialized publications, that Brazil was overheating and in risk of losing control over inflation. CFK isn't nearly as worried about the interests of financial capital, as proven by the traditionally high-handed that she deals with the currency market and her refusal to sacrifice growth for the sake of low inflation.

    Jul 14th, 2012 - 04:31 pm - Link - Report abuse 0
  • toxictaxitrader

    What would Michele Bachet do?her balanced approach can solve everything

    Jul 14th, 2012 - 05:55 pm - Link - Report abuse 0
  • British_Kirchnerist

    #5 “CFK isn't nearly as worried about the interests of financial capital, as proven by the traditionally high-handed that she deals with the currency market”

    Thats why I love her! She's high handed with the bankers and generous with the poor

    #6 I think Michelle may be more like Cristina next time round, now that Chilean society has been opened up by the 2011 protests

    Jul 14th, 2012 - 07:35 pm - Link - Report abuse 0
  • Max

    & 5

    You should be stay out of ordinary/hearsay comments ......
    **
    Brazil money market interest rates made balance curve last year

    started Jan by 10.83 % ...in July saw 12.38 % and after lowering to 10.84 in December gradually...now at the same level.

    Long term interest rates never changed stayed at 6 % level.
    **
    This doesn't explain why the Economy has been slowing down !

    Jul 14th, 2012 - 07:37 pm - Link - Report abuse 0
  • Forgetit86

    #6
    Bachelet is just a center-left politician. If she was in the same situation as Dilma, she'd probably would resort to the same, market-based policies that Dilma is employing and that, IMO, won't work. As the market itself is unstable and unwilling to take up risks, solutions to effects of the world crisis will require a break with the centrist consensus, and the market-based ideology it presupposes.

    Jul 14th, 2012 - 07:45 pm - Link - Report abuse 0
  • Forgetit87

    #8
    Max = geo?

    It doesn't actually matter that interest rates are lower now. Business owners' “animal spirits” has been already affected. The government embraced the overheating hysteria of the markets. And -- this at a time that the Euro crisis was deepening and the US was undergoing serious talks about sovereign debt -- cut public investment and increased interest rates, in response. Government actions gave support to a pessimistic narrative about the national economy in a moment that the world scenario was already gloomy -- thus, denting investor feeling. Just cutting back interest rates won't do.

    Jul 14th, 2012 - 07:53 pm - Link - Report abuse 0
  • geo

    10/

    You remember i had declared few times at many Brazil related articles
    since last years.

    .. The Brazil Economy can never grow at high level speeds...
    .. The interest rates lowering will be vainly and won't do ..
    .. The Brazil Economy is not as same as Argentina Econ has high growth rates.
    .. The Global Trade restrictions have lagged effects on Countries' Econ growth rates..can not be direct main reason.Brazil export 13 % GDP.

    For example : recent China growth slowing not caused from foreign trade ex-post effects.

    Jul 14th, 2012 - 08:21 pm - Link - Report abuse 0
  • Forgetit87

    - “.. The Brazil Economy can never grow at high level speeds...”

    This is silly and you have never provided any reasons for that. Brazil's growth problems are tied to its dependency on hot cash to spur investment. During the 2007-2010 period, however, the country grew well, and partly because it had to some extent broken with that dependency by giving a more prominent role for public funds and SOEs to invest more. During that period, fixed goods investment baceme a major growth engine, mostly because of state micro-reforms to spur investment. (All good periods for the Brazilian economy have coincided with state activism.) Much of the recent slowdown is due, not to any impossibility for long-term growth for Brazil, but to current policies that have left investment to the market only, departing from the previous years.

    - “The interest rates lowering will be vainly and won't do”
    I had already said this.

    - “The Global Trade restrictions have lagged effects on Countries' Econ growth rates”
    But Brazil has forms of foreign dependency other than exports. Many sects of the economy are hooked on hot money and short-term loans from abroad. And with the crisis, the inflow of such cash isn't the same as before. In other words, the economy is deprived now from both public and speculative money.

    Jul 14th, 2012 - 08:52 pm - Link - Report abuse 0
  • geo

    ..during the 2007 - 2010 period...the country grew well.
    but
    FOREIGN TRADE(export/import) lowered between from mid 2007 until the end of 2009.
    **
    foreign direct investment (FDI)
    FDI lowered from the start of 2008 until the end of 2009.
    FDI soared from 2009 until the mid 2010 but no positive effects on the growth.
    **
    BANK LENDING to both household/firms soared even after year 2010 but no growth up.
    **
    GROWTH RATE lowered entered to negative between 2008-2010
    jumped to high rate start of 2010 but lowered sharply until the end of 2011 and today...
    **
    HOT MONEY especially focused in short term equities not direct loaning of the firms.

    Jul 14th, 2012 - 09:45 pm - Link - Report abuse 0

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