Tuesday, March 28, 2006

Palocci Capitulates

Antonio Palocci achieved an impossible; he made of the left wing ruling party Partido dos Trabalhadores (PT) a regional model of financial prudence and orthodox economics. Indeed, the markets responded negatively to his resignation to the Brazilian Finance Ministry.

Palocci´s capitulation was triggered by a corruption scandal involving illegal party finance. He is to be replaced Guido Mantega, the current president of the State development bank (BNDES).

With Palocci out of sight PT radicals could gain influence and jeopardize the economic stability achieved by the current administration.

Presidential elections are around the corner. These scandals will tempt incumbent candidate, Luis Inacio Lula Da Silva to become more of a populist and short term planner. If he falls victim to the temptation, Brazil, the largest South American economy will pay the consequences. There is nothing new under the sun.


At 7:40 PM, Blogger Luís Afonso said...

Even the PT radicals were defeding Palocci. They know that Palocci's plan is a kind of NEP (new economic policy) to hide the gramscian revolution to take over while we sleep using the "orthodoxy" pillow.
They will keep on this strategy. They can't win only relying on the "popular" vote.
But the popular vote in Brazil is the more conservative than middle-class'.
It seems a good field to Geraldo Alckmin to rise up as a tough adversary.

At 9:05 PM, Blogger Camilo Pino said...

This is Alckim's moment of truth but the same can be told for PT radicals. Will be interesting to see how voters intention moves in the next few weeks.


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