President, Alberto Fernandezwill travel this Tuesday to Brazil to meet his peer, Luiz Inacio Lula da Silva, with financing as one of the most urgent agendas, in a context of scarcity of foreign currency. For this reason, in the last few hours the Minister of Economy joined the entourage, Sergio Massawho could meet his peer, fernando haddadand establish an import payment mechanism, similar to what was agreed last week with China to trade with yuan.
Together with Alberto Fernández the chancellor will travel, santiago cafieroand the meeting with Lula at the Palacio do Planalto, in Brasilia, will also be attended by the Argentine ambassador to Brazil, Daniel Scioli. The agenda, which has the urgency of seeking financing, was known in January when Lula took office in Brazil and his first international trip was to visit Argentina. There his Minister of Economy, Haddad, announced to businessmen that they were going to increase credit lines to finance exports from Brazil to Argentina (and therefore local imports).
The theme was part of the conference call between Alberto Fernández and Lula da Silva last Thursday. However, there was already 11 meetings on the subject of financing from September of last year to today. They included from meetings between the president of the Central Bank, Miguel Ángel Pesce, with his counterpart from Brazil, Roberto Campos Netoand even a bilateral one between Scioli and the Vice President and Minister of Industry and Commerce of Brazil, Geraldo Alckmin. Close to Scioli they told Ámbito that The objective of the meeting is “to generate financial engineering to boost commercial exchange and decompress the use of dollars”.
Massa also discussed the issue with Haddad at the end of February in India, within the framework of the G20. Sources from the Palacio de Hacienda explained to Ámbito that what is sought is to be able to finance exports of Brazilian companies (Argentine imports), with the purpose of “strengthening reserves”. They explain that they are negotiated between “Four options against the clock to move fast with a forceful support scheme.”
Close to Massa, they assure that the negotiations are taking place together with his counterpart Haddad, but also Vice President Alckmin and Gabriel Gallipolo, executive secretary of the Ministry of Finance of the neighboring country. On the trip, Massa will be accompanied by his small table on international and financial matters: Leonardo Madcur, Lisandro Cleri and Marco Lavagna.
Close to Massa, they added that it would be something “similar” to the agreement announced last week with China, to pay for imports from that country with yuan, and thus decompress the dollar.. In fact, last Friday Massa received executives and CEOs of important companies that have strong commercial ties with Brazil, such as automobiles (from Peugeot to Ford), industrial inputs (from Techint to Aluar), and to anticipate that there will be measures to “streamline” business operations with Brazil.
Galípolo, a member of the Brazilian Ministry of Finance, explained in a dialogue with the media in that country that there could be a new line of credit to finance Brazilian companies that export to Argentina. The goal is to reach some 210 companies, especially large industries, who trade with Argentina. In fact, he mentioned that due to the lack of credit, Brazil lost some US$6,000 million of commercial exchange, a terrain that China occupied, for having “alternative financing and payment mechanisms”.
Massa’s meetings on Tuesday will be about bilateral trade. Then, on Wednesday, he will meet with Rodrigo Mayapresident of the “Confederação Nacional das Instituições Financeiras (CNF)”, an entity where the main institutions of banks and the Brazilian stock market are located.
Geopolitics
Despite the fact that the financing announcement was made in January, official sources told this newspaper that part of the difficulties for the implementation they have to do with the politics of Brazil, with a Central Bank facing President Lula da Silva. His head, Campos Neto, was appointed by former President Jair Bolsonaro, and the PT even called for his resignation. In any case, close to Scioli have good expectations of the results due to the “political affinity” between the two countries.
In fact, last week Lula da Silva in public statements accused the IMF of “asphyxiate” to Argentina, was in favor of “de-dollarize” commercial exchanges, move forward with a common currency among the BRICS (Brazil, Russia, India, China and South Africa) and use the new BRICS development bank (NDB), as an “alternative” to the World Bank. It would be exactly this bank the one that would finance the new line of credit to oil the commercial exchange between both countries. The BRICS bank is chaired by the former president of Brazil, Dilma Rousseff.
energy agenda
Embassy sources said that one of the issues that was finalized on April 20 was the expansion of the use of the SML (Local Currency System), a payment system for commercial operations, through which more financial institutions were authorized, like exchange houses, to operate with SML.
Another topic on the agenda will be energy, for that the Brazilian Development Bank (BNDES) finance a part of the second stage of the Néstor Kirchner gas pipeline, for almost US$700 million. For this matter there was already 18 meetings since October of last year, which included not only Scioli but also members of Enarsa and the Energy Secretariat.
Source: Ambito
