MercoPress. South Atlantic News Agency

Lula insists on addressing inequality

If we do not address inequality, people may have a better climate, but will continue to die of hunger, Lula warned

Brazilian President Luiz Inácio Lula da Silva Friday insisted in Paris on the advantages of using a common currency for foreign trade operations and underlined once again that the European Union's demands for the Mercosur agreement were a “threat.”

“I am willing to make an agreement with the EU, but it is not possible,” Lula said in front of French President, Emmanuel Macron, during his speech at an event held at the Brongniart Palace, in Paris, reproaching Brussels for having drawn up an additional clause with which a strategic partner is “threatened”. The day before while still in Italy, Lula had described as “unacceptable” Brussels imposing a new clause.

Lula criticized provisions allowing European and Brazilian companies to receive the same treatment by the Federal Government, or sanctioning South American countries that fail to comply with the 2015 Paris Agreement, regarding their specific commitment to reduce greenhouse gas emissions.

The Brazilian President was also critical of a law approved by the European Council in May this year banning imports from deforested areas after 2020, under penalty of fines. Lula also defended the need to include the fight against inequality at the center of the political chessboard, together with the climate issue.

”It is not possible that in a meeting between presidents of important countries the word 'inequality' does not appear (...) We are in an increasingly unequal world and wealth is increasingly concentrated in fewer hands. If we do not address this issue with the same priority as the climate issue, people may have a better climate, but people will continue to die of hunger,“ he warned.

Lula also addressed the idea of creating a common currency in Latin America and wondered why Brazil and Argentina, for example, have to trade with the dollar. In this regard, he stressed that this is one of his priorities and as such he will raise it at the next BRICS meeting.

In turn, he promised to put an end to illegal deforestation in the Amazon by 2030, called on richer countries to invest in less developed economies and help to truly fight poverty, and defended a new design of the United Nations Security Council. ”Today's permanent members no longer represent the political reality of 2023,“ he said.

Regarding his country's affairs, Lula criticized Central Bank President Roberto Campos Neto for keeping the Selic interest rate unchanged. He said the economic situation in his country was ”irrational“ and accused Campos Neto of ”playing against the economy“ after maintaining the basic reference interest rate at 13.75% per annum.

”It is not a dispute between the Government and the Central Bank. It is Brazilian society that is against the Central Bank. What is happening in Brazil is irrational, we have a rate of 13.75% with inflation at 5%,” Lula said from Rome before leaving for Paris.

Campos Neto was appointed by former President Jair Bolsonaro to head the Central Bank until 2024.

The BCB's inflation target for this year is 3.25%, with a tolerance of up to 4.75%. Currently, the accumulated inflation in 12 months is 3.94% and the financial market expects that 2023 will close with a price increase close to 5% in Brazil, the main Latin American economy.