Brazil's Cardoso: Europe Needs To Follow U.S., Cut Rates
Dow Jones Newswires
OPORTO, Portugal -- Brazilian President Fernando Henrique Cardoso said
Saturday that the U.S. and Europe must pursue concerted policies to
reactivate growth and that Latin America will do its part by adopting austerity
measures.
Speaking at a press conference during the eighth annual Ibero-American
summit, Cardoso said that while Latin America understands such issues as
reforming international financial architecture, the region is more worried about a
looming global economic slowdown.
"It's time to take wider ranging and more immediate measures. These are
centered on access to markets and lower interest rates," Cardoso said.
But at the same time, Cardoso said he's determined to implement additional
belt-tightening measures in his own country. "I'm going to implement an
austerity program," the president said, without providing further details.
"In principle the presidents of the three countries (Brazil, Argentina and
Mexico) are willing to act together to call on the U.S. and Europe to take more
energetic measures...in the short term," he said.
"What we are worried about is an eventual slowdown in economic activity," he
said.
To avoid that, Cardoso said it's essential that industrialized countries take
"anti-cyclical" measures immediately.
More specifically, he said, they must cut interest rates.
"It's true that the Fed has already taken this position, but it's also true that some
European countries haven't," Cardoso said. "There are other central banks that
can and should act quickly."
He said developed countries must allow greater access to their markets, and
criticized the U.S. for continued problems over trade in Brazilian orange juice,
steel, footwear and other products.
In addition, commercial banks must continue to finance international trade
"because by retreating they aggravate the crisis - not just ours, but the general
crisis".
The other thing countries should do is create a contingency fund for times of
crisis, which would be available even to countries like Brazil, which has
relatively beefy reserves, Cardoso said.
"Because of the international situation, it would be good to have a contingency
fund available to countries which...may need it," he said. He said the fund,
which would be organized by the International Monetary Fund, could total as
much as $90 billion.
-By Michelle Wallin and Erik Burns; 351-931-265-020; mawallin@ap.org;
eburns@ap.org |
