Political Risk Latin America Blog @PolRiskLatam

Wall St darling looks set to stay close to Brazil’s new president

Posted in News and Articles, Political Risk by politicalrisklatam on November 26, 2010

by Barney Jopson for Financial Times – Beyond Brics, November 26th, 2010.

A key element of intrigue over Brazil’s new economic policy team has been the question of what happens to Antonio Palocci, a former finance minister and a Wall Street favourite.

The answer, if you believe one of Brazil’s top newspapers on Friday, is that he will be chief minister in the government of Dilma Rousseff, the incoming president. Investors would welcome his appointment as a sign Rousseff is serious about fiscal discipline – although they were more preoccupied on Friday by the future of monetary policy.

O Estado de Sao Paulo reported Palocci’s appointment here in Portuguese, and although it is not well sourced it has a ring of truth to it, and is consistent with the way that word of other recent appointments has come into the public domain.

Palocci was the first finance minister in the government of Rousseff’s mentor, president Luiz Inácio Lula da Silva, but he was forced out of office by a corruption scandal in 2006 that continues to make him a tempting punch bag for political enemies.

Still, investors remember him fondly for persuading Lula to stick to the macro policies put in place by a previous regime. (continue reading… )

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