Tag Archives: domestic politics

Brazil’s free market agenda is in doubt as the president hopes for re-election | Instant News

SÃO PAULO – Brazil’s Economy Minister Paulo Guedes, who just two years ago pledged to lead a free-market revolution in Latin America’s largest country, is increasingly finding himself relegated to breaking control as President Jair Bolsonaro deepens the role of the state in the economy.

Guedes’ mission to lower public debt and build investor confidence in Brazil took a hit after the country’s far-right leader on Friday nominated a new head of the country’s oil company.

Brazilian Oil

SA, or Petrobras, spurred investor flight this week from the nation’s equities and currencies.

With a focus on re-election next year, Mr Bolsonaro, a former army captain who has publicly said he knows nothing about the economy, nominated a military man to the helm of the company after the current chief executive refused to lower fuel prices.

Petrobras said Tuesday it will schedule meeting to assess presidential nominations of a new CEO.

“It is now clear that the president himself is not as committed to a liberal economic agenda as the public once thought, even though his finance minister does,” said Bernard Appy, former secretary of economics at the ministry.

The Petrobras Refinery in Rio de Janeiro; the company said it would meet to assess President Jair Bolsonaro’s candidacy as new CEO.


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Guedes, a 71-year-old investment banker who only entered politics in 2019 when Bolsonaro took office, has remained silent since the president on Friday night appointed General Joaquim Silva e Luna as CEO of Petrobras. Mr Bolsonaro and Mr Guedes declined requests on Wednesday for comment.

A person close to the minister said the economist who graduated from the University of Chicago had no intention of leaving Bolsonaro.

The minister knows that his exit will only scare investors even more, and he still believes he will have the opportunity to undertake a series of reforms to improve Brazil’s business environment, such as simplifying the country’s Byzantine tax system and introducing new rules to curb government spending, said a familiar person. with ministerial thoughts.

“Of course he is not happy with what happened [at Petrobras], “Said the man, adding that the minister felt less responsible for oil producers than other areas of the economy because it was under the scope of the ministry of mining and energy.

Brazil’s Minister of Mines and Energy, Bento Albuquerque, an admiral in the Navy, said in an interview that the government was simply seeking greater stability in fuel prices, denying that it would intervene or force Petrobras to pay subsidies.

“It is the president’s prerogative as controlling shareholder to appoint whoever he wants,” he said, adding that the government was studying ways to avoid sharp swings in fuel prices, including creating funds that could be announced in two months.

In an interview with The Wall Street Journal in October, Guedes described how he had long planned to venture into politics, his hopes were high for what he could achieve.

Co-founder of Latin America’s largest investment bank, BTG Pactual, Guedes says he has been inspired by the likes of Ronald Reagan and Margaret Thatcher to reduce the size of Brazil’s swelling government.

“We will give up market power,” said Guedes, defending the president.

“Bolsonaro really wants to change the country,” he said. He explained that he sees Bolsonaro’s government as an alliance of liberal and conservative economies and is the country’s best bet to decide the way of the two left-spending presidents who have preceded Bolsonaro.

The support of Mr Guedes during Mr Bolsonaro’s election campaign was critical to getting votes from centrists and business leaders, sealing a conservative victory.

But the others saw Mr. promise. Guedes as unrealistic and naive, shows the mentality of a business leader who has never worked with politicians before.

“He created expectations of a liberal revolution that he never had the means to carry out,” Luiz Carlos Mendonça de Barros, former head of Brazil’s state bank BNDES, told the Folha de S.Paulo newspaper. We watched and laughed, anyone who has experienced the boundaries of politics knows what I mean.

Mr. Government. Bolsonaro is off to a good start in the eyes of investors. In its first year in office, the country went through a long-awaited overhaul to downplay Brazil’s generous pension system, which is estimated to have saved public accounts an estimated $ 200 billion over a decade.

The president filled his government with market-friendly figures, appointing another Chicago alumni, Roberto Castello Branco, as chief executive of Petrobras. Meanwhile, Guedes set his sights on the privatization of hundreds of state-owned companies, from banks and power companies to the state postal service.

Slow progress. Then the pandemic hit.

Covid-19 has hit Brazil, killed a quarter of a million people, and sparked widespread criticism of Mr crisis management. Bolsonaro. Faced with growing demands from political opponents for his impeachment, the great leader returned to the populist movement to please his political base – a strategy analysts say marked his nearly three decades as a congressman.

If successful, Bolsonaro will ensure his short-term political viability and increase his chances of being re-elected in next year’s presidential election, political scientists say.

Bolsonaro issued a presidential decree to loosen gun ownership rules with a nod to his conservatives, while supporting a program of generous payments for the poor. Mr Guedes, seeking to safeguard the country’s fiscal health, has suggested paying less than $ 40 a month per person; the government has tripled that figure.

After spending as much as $ 10 billion a month on payments during last year’s pandemic, the country is preparing to resume payments in the coming weeks. Brazil released figures on Wednesday showing its public debt hit a record in January, rising to an estimated $ 930 billion.

But many investors see Bolsonaro’s nomination of Petrobras as the boldest move, contradicting his administration’s promise to reduce the size of the country in the economy and the president’s own promise to let the country’s oil companies set prices according to international markets. .

On Monday, on the first full trading day following Mr Bolsonaro’s candidacy for General Silva e Luna, investors fled Petrobras, wiping out about $ 13 billion from the company’s market value, the second biggest daily loss for the company since the 1990s.

The candidacy followed a dispute between Bpk. Bolsonaro and the current CEO of Petrobras are concerned about rising fuel prices, fueling concerns that the president intends to force companies to fund fuel subsidies in the country again – policies that cost around $ 30 billion between 2011 and 2016 under leftist administration.

While oil producer stocks have recovered since then, economists say it will take a long time to repair the damage to the reputation of companies and countries.

“Who is a Brazilian or foreign investor who wants to buy Petrobras shares?” said Maílson da Nóbrega, a Brazilian economist and former finance minister who praised Guedes for his optimism. “I thought [Mr. Guedes] hopes that he can push for reforms and leave his legacy, but it is becoming increasingly difficult. “

Write to Luciana Magalhaes and [email protected] and Samantha Pearson at [email protected]

Copyright © 2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8


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Italian Residents Join the Establishment | Instant News

Mario Draghi speaking in Washington, October 14, 2017.


jim watson / Agence France-Presse / Getty Images

Italy, like the US, has recently completed experiments in populist governance. The anti-establishment Five Star Movement and the anti-immigration League formed a coalition after general elections in 2018, but the coalition broke up after less than a year. As in America, the new head of government is an established figure. But unlike President Biden, Prime Minister Mario Draghi is better known as a politician than a technocrat: an economist with a doctorate from MIT who heads the Italian Ministry of Finance, the Bank of Italy and the European Central Bank. He shuns social media and rarely gives public interviews or speeches.

“When I was prime minister, Mario Draghi was the director general of the Treasury. I know him personally and professionally, “Lamberto Dini told me. He led the government in 1995-96, “He was very quiet. He would only call when there was a problem to solve, and he would solve it. He’s not just a technocrat; he is a great political figure. ”

Mr Draghi, 73, is best known for rescuing the euro during its debt crisis in 2012. He promised in his speech that the ECB will do “whatever is necessary” to save the eurozone, stopping international speculation on the currency.

This month President Sergio Mattarella appointed Mr Draghi to head the national unity government. Unlike in the US, there is no populist reaction to the new established leader. In contrast, the anti-establishment Five Star League and Movement was so eager to join the new cabinet that they abandoned their previous eurosceptic positions. The coalition also includes the center-left Democratic Party, the free market Forza Italia, and the socialist-democratic Free and Equals Party. The only opposition party is the far-right Brothers of Italy.

The unelected Mr Draghi was very popular with voters. According to a survey by Noto Sondaggi, Italy’s leading poll, 56% of Italians trust him – the highest number recorded in two decades. Markets seem to share the feeling: The Italian bond yield benchmark hit a record low after the appointment.

Bringing together a diverse coalition will be a challenge for the new prime minister. For starters, he reappointed Luigi Di Maio Five Star as foreign minister. Mr. Party Di Maio opened Italy to the Chinese Communist Party by signing the Belt and Road Initiative. Mr Draghi is committed to Italy’s alliance with the US and needs to persuade the Five Star Movement to change course.

In a country where Covid has been particularly hard-hit, Mr Draghi will also manage an aid program larger than the Marshall Plan – $ 240 billion from the European Union’s Recovery Fund. He oversaw the ECB’s quantitative easing after the 2008 financial crisis, and he appointed League members to the major economics ministries, a signal that he plans to increase productivity by reducing taxes and reforming inefficient bureaucracies. Expenditures will be directed carefully to businesses with prospects for success and unemployment.

“It looks like we’ve come to an agreement,” Giovanni Orsina, historian and dean at Rome’s LUISS University, told me. Voters vote for anti-establishment parties, but they lack the competence to lead. Italy will find out if a trusted leader can satisfy popular discontent by combining expertise with a different populist vision.

Ms. Bocchi is Joseph Rago’s Memorial Fellow of the Journal.

Journal Editorial Report: Paul Gigot interviews economist Douglas Holtz-Eakin. Image: Stefani Reynolds-Pool / Getty Images

Copyright © 2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Appears in the print edition of February 25, 2021.


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Facebook will restore news in Australia after the government agrees to amend the bill | Instant News

Facebook Inc. will restore links to news articles in Australia, five days after blocking news from its platform in response to a proposed law requiring tech giants to pay publishers for their content.

“We are restoring the news on Facebook in Australia in the coming days,” said Campbell Brown, vice president of Facebook’s global news partnership, in a statement late Monday.


said it had reached an agreement with the Australian government to amend the bill, allowing, among other things, a two-month mediation period to reach an agreement with the issuer before entering arbitration proceedings if an agreement cannot be concluded.

“After further discussion, we are satisfied that the Australian government has agreed to a number of changes and guarantees that address our core concerns about allowing commercial deals that recognize the value our platform provides to publishers in relation to the value we receive from them,” Facebook said in a separate statement. .

The resolution comes after talks between Facebook CEO Mark Zuckerberg and Australian Treasurer Josh Frydenberg over the weekend.

The social media giant suddenly blocked news articles from its platform last Wednesday in response to upcoming legislation, in motion invite criticism. At the time, Facebook said that the Australian government “fundamentally misunderstood the relationship between our platform and the publishers using it”.



Google, faces the same regulations, instead entered into a series of deals with Australian news publishers to obey the law.

The Australian Parliament is expected to approve the bill – which is meant to support journalism – soon. Other countries, including Canada, see the Australian model as a roadmap for additional regulation in their country.


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US Report Allows Russia’s Pipeline Project to Continue, for Now | Instant News

The State Department in a report to Congress did not identify the new company as a target for sanctions related to a $ 11 billion pipeline designed to deliver Russian natural gas to Germany, allowing pipeline work to continue for now.

Some Republican lawmakers have criticized the State Department for the Nord Stream 2 report, which is required by Congress, and both Republicans and a key Democrat are asking for an explanation of government positions.

The Trump administration, urged by Congress, signed legislation in 2019 and 2020 that stopped construction of the pipeline for more than a year until resumption earlier this month. The Biden administration called the project a “bad deal,” but Nord Stream 2 is forming a pressure point between the new government and the bipartisan Congressional coalition that has attacked the project.

The report is expected to provide list of companies involved in pipeline construction and therefore subject to US sanctions. In contrast, the State Department named two entities previously sanctioned by the Trump administration – the main pipeline laying vessel and its owner – along with 18 companies, mostly insurers, that had either left or left the project.

Failure to set new targets for sanctions allows work to continue while also allowing time for administration discussions with Germany about the project and to formulate its own policies on the pipeline.


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The Australian Prime Minister urged Facebook to lift the news blockade | Instant News

CANBERRA, Australia – The Australian Prime Minister on Friday urged Facebook to lift the blockade of Australian users and return to the negotiating table with news publishing businesses, warning that other countries will follow their government’s example in getting the digital giant to pay for journalism.

Prime Minister Scott Morrison described Facebook’s move on Thursday to prevent Australians from accessing and sharing news as a threat.

The blockade has raised disputes with the government over whether powerful tech companies should pay news organizations for content.

“The idea of ​​shutting down the kind of site they did yesterday was a kind of threat – I know how Australians are reacting to it and I don’t think it’s a good move on their part,” Morrison told reporters.

“They have to move quickly past that, get back to the table and we will finish it,” he added.

There is public outrage about how Facebook is

The blockade was imprudent, cutting off access – at least temporarily – to the pandemic, public health and emergency services.

Newspaper headlines included: “No likes for non-social networks”, and “Face lock”.

An article about how fake news will replace credible journalism on the Australian feed carries the headline: “The ‘fake book’ shows that it only matters profit, not people.”

Several non-Australian outlets also appeared affected, with posts disappearing from the UK’s Daily Telegraph and Sky News Facebook pages. The two share names with news outlets in Australia.

The blockade was a response to the House of Representatives on Wednesday evening passing a bill that would see Facebook and Google pay Australian media companies fair compensation for journalism linked by the platform. A law must be passed by the Senate to become law.



Google has responded promptly to work on content licensing deals with major Australian media companies under its own News Showcase model.

Rupert Murdoch’s News Corp.

has announced a broad agreement with Google covering operations in the United States and United Kingdom as well as Australia. Australia’s premier media organization, Seven West Media

also reached an agreement earlier in the week. Rival Nine Entertainment

reportedly approaching the pact itself, and the Australian Broadcasting Corp. state property is negotiating.

Morrison said he discussed Facebook’s dispute with Indian Prime Minister Narendra Modi on Thursday. Morrison also discussed proposed Australian legislation with the leaders of Britain, Canada and France.

“There is a lot of global interest in what Australia is doing,” Morrison said. “That’s why I invite, as we did with Google, Facebook to engage constructively because they know that what Australia is going to do here is likely to be followed by many other Western jurisdictions.”

Treasurer Josh Frydenberg, the minister in charge of the proposed News Media Bargain Code, had a phone conversation with Facebook chief executive Mark Zuckerberg after the blockade started on Thursday and again on Friday.

“We discussed their remaining problems & agreed that our respective teams would resolve them soon. We’ll talk again over the weekend, ”tweeted Frydenberg on Friday.

“I affirm that Australia remains committed to implementing the code,” added Frydenberg.

Frydenberg stated that Facebook had been in constructive negotiations with the Australian media regarding a payment agreement immediately before the sudden blockade.

Facebook said on Thursday that the proposed Australian legislation “fundamentally misunderstands the relationship between our platform and the publishers using it.”

Morrison said his government was “happy to hear them on technical matters” but remained determined to pass the law.

“You can’t help but be friends with Australia because Australia is very friendly,” said Morrison. “We want to remain friends and this is the time they are friends with us again.”


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