Brazilian President Luiz Inacio Lula da Silva stated Brazil will serve as a facilitator to try and arrange BRICS bloc assistance for Argentina. Lula stated that the New Development Bank — the BRICS bank — could modify some of its rules to aid Argentina. Also, the two countries are negotiating the establishment of a credit line to pay for Brazilian exports in reals.
Brazil to Serve as Bridge Between BRICS and Argentina
Brazilian President Luiz Inacio Lula da Silva committed to serving as a liaison between Argentina and the BRICS bloc — integrated by Brazil, Russia, India, China, and South Africa — to facilitate economic help to aid the country in its financial and economic crisis.
In a 4-hour meeting that took place in Brazil, Lula vowed to help his Argentine counterpart Alberto Fernandez in seeking international assistance for the ailing country. Lula stated:
From a political point of view, I made a commitment to my friend Alberto Fernández that I will make any and all sacrifices so that we can help Argentina in this difficult time.
Lula criticized the role that the International Monetary Fund (IMF) has played in the progress of the situation that Argentina, registering record numbers of inflation and devaluation, is currently facing. Lula called the IMF to “take the knife from Argentina’s neck,” explaining:
The IMF knows how Argentina got into debt, knows who it lent the money to. Therefore, you cannot keep putting pressure on a country that only wants to grow, create jobs and improve people’s lives.
Concrete Steps
During the meeting, which also had the assistance of the Economy Minister of Brazil and more of Lula’s aides, President Lula called Dilma Rouseff, the current President of the New Development Bank, in order to modify a rule to allow the institution to offer direct aid to a state outside of the BRICS bloc. “Dilma was riding her bike in the morning in China and she promised to propose that the article be removed,” he stated.
The two states are also discussing the possibility of establishing a direct credit line to allow Brazilian exports to be collected in reals from an intermediary bank, with Argentina replenishing these funds later. This would allow Brazilian companies to regain their place as significant partners of Argentina, which opportunity was taken away by China. Brazilian Minister of Finance Fernando Haddad estimated that Brazil had lost $6 billion in exports during the last five years against China in Argentina.
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