Sunday, October 30, 2011

Brazil and Europe

This sort of story would have been inconceivable not too long ago. Europe wanted Brazil to buy up bonds as a way of easing the European debt crisis. Brazil not only said no, but said they will only take it up through the IMF.

But Brazilian Finance Minister Guido Mantega echoed calls for Europe to solve its own burgeoning fiscal problems, saying Brazil had no intention of making such purchases. 
"I believe that European countries do not need funds from Brazil to buy bonds. Brazil is not considering it," Mantega told reporters in Brasilia. "They have to find solutions to the European problems within Europe."

According to Brazil, other solutions were too "nebulous." During the Latin American debt crisis, the developed world told Latin American governments that they were incompetent and no more credit would be forthcoming without IMF-led structural adjustment. This is like coming full circle, as Brazil is doing something similar, assuming that any IMF package would involve reforms of some sort. Given the fact that debt crises hurt the average person, this is nothing to celebrate, but is so indicative of how far Brazil has come just since Lula first took office.


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