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Strategies & Market Trends : Telebras (TBH) & Brazil -- Ignore unavailable to you. Want to Upgrade?

To: wl9839 who wrote (11900)	1/17/1999 11:49:00 PM
From: wl9839	Respond to of 22640

Brief insights into the workings of the Itamar Franco mind. Brazil's Franco revenges self on current president By William Schomberg BRASILIA, Jan 17 (Reuters) - For years former Brazilian President Itamar Franco has been claiming to be the true father of the country's inflation-busting Real Plan, but he may go down in history instead as its executioner. Quirky even by the standards of Brazil's politicians, Franco sparked a crisis that by last week had led to a 15 percent devaluation of the real, the currency he proudly launched while president in 1994. Just days after being sworn in as governor of industrial Minas Gerais state on Jan. 1, Franco, 68, announced a temporary moratorium on debts to the federal government. He barely bothered to disguise the fact that his action targeted President Fernando Henrique Cardoso. Cardoso was Franco's finance minister at the time of the real's launch and earned his loathing by receiving all the credit for the country's economic progress. Franco's moratorium was greeted with weary resignation by Brazilian investors, long used to his quixotic moves. But it proved the last straw for nervous foreigners, already upset by Brazil's stop-start attempts at fiscal reform to narrow a huge budget deficit. ''Investors want to know how many Itamar Francos there are in Brazil,'' one financial executive was quoted in the local media as saying. As the world fretted that Brazil might plunge emerging markets into crisis and set off a new round of global turmoil, Franco found himself in the firing line. Mexican President Ernesto Zedillo led the charge. ''Hopefully, this irresponsible act will be the last monument in Latin America raised by those merchants of misery who are populist politicians,'' Zedillo, a defender of free market politics, said during a visit to Costa Rica on Friday. Franco, apparently enjoying being back in the world spotlight, hit back on Sunday. ''I will not reply to a corrupt government like the Mexican government,'' he said. ''The president should take care of his poor and his Chiapas,'' he added, referring to the Mexican state where guerrillas have been waging civil war since 1995. Franco was barely known before he was picked as Fernando Collor's running mate in the 1989 presidential race to win votes for Collor in populous Minas Gerais state. When Collor resigned amid a flurry of corruption allegations in 1989, Franco was thrust into the presidency. After going through a succession of finance ministers -- and publicly reproving one when his maid complained about the price of gas -- he eventually appointed Cardoso to introduce the measures that killed inflation. But Franco will probably be best remembered for flirting with a pantieless samba dancer at the Rio de Janeiro carnival in 1994. Now, sensing the chance to make a name for himself again ahead of the 2002 elections, Franco is seeking recognition as an opposition leader. He was due to receive a number of opposition governors on Monday and was expected to ask them to copy his moratorium. Political commentators noted, however, that not even governors from the radical left-wing Workers Party had gone as far as Franco by actually suspending payments. Two governors from that party have opted instead to challenge debt agreements with the federal government in the courts. Brazilians gained new insight into Franco's mind-set on Sunday from a psychologist who attended a strict Protestant school with him as a boy. ''As a child and in adolescence, he used to listen each day for an hour to the stirring, Messianic speeches of the pastors,'' Jacob Pinheiro Goldberg wrote in the weekly newsmagazine Veja. ''In the current situation in Brazil, he must feel fulfilled. He, the true savior of the homeland, is facing Fernando Henrique Cardoso, who is, after all, only the president,'' Goldberg said.