ROMA – Brazil’s monetary policy turns to the left – this is the incipit of Luca Pisapia’s article, which we report here in large excerpts, taken from Valori.it, ethical finance and sustainable economy newsdirected by Andrea Barolini – Or so promises the nomination of Gabriel Galípolo as president of the Central Bank of Brazil (Bcb), the Central Bank of Brazil. Appointed in 2023 by Lula as director of monetary policy of the same Bcb, the young economist, at only 42 years old, will officially succeed former governor Roberto Campos Neto on January 1, 2025. And as he has already announced, he intends to radically change the monetary policy of Jair Bolsonaro’s man, who had bet everything on high interest rates and low inflation. A way to favor foreign investors and existing wealth, to the detriment of workers and public investments.
An aside from the editorial staff of Mondo Solidale. PBefore continuing with Pisapia’s article, let’s add a note from the editorial staff of Mondo Solidale to remember that Brazil has a population of about 210 million inhabitants; 4.9 percent of whom live on less than $1.90 a day, according to recent data from the World Bank, that is, about ten million people cannot even afford the daily food necessary to survive. But let’s get back to Pisapia’s article.
Promises of change. Starting with the cut in interest rates, which have risen in recent years to a suffocating 10.5%. In order to have “lower and more sustainable rates, capable of encouraging the population to have greater access to credit” and to be able to “improve their income” and their purchasing power. All of this, and here it will depend on his ability as an economist, without inflation rising excessively.
The central banker’s policy directions. More or less openly, and more or less directly, that of central bankers is always a political appointment. Governmental or presidential, depending on the institutional form that governs the country. When Giorgia Meloni came to government, Fabio Panetta ascended to the Bank of Italy, whose name was already circulating as a possible Minister of Economy. It was a way for the Prime Minister to gain credibility in Europe. And to ensure a certain continuity with the Draghi line. When Trump came to power, he appointed Jerome Powell as head of the Fed, but he later criticized his public spending policies under the Biden presidency. And today Trump himself has already made it clear that in the event of success against Kamala Harris, he is ready to replace him.
A completely political choice. In Brazil, the current governor Roberto Campos Neto was, in the same way, a completely political choice. In addition to extremely violent policies against the environment, workers, indigenous people and civil rights, Bolsonaro wanted to change the economic architecture of the country. To do so, he asked the BCB, not before making it “formally independent”, in 2021, for a series of draconian measures. Stop all investment in welfare, healthcare and public spending in general. Increase interest rates beyond measure, so that it would become advantageous for foreign investors to invest in the country. With the result that Brazil was sold off to aggressive finance, inflating budgets to the detriment of the well-being of the population. Now Galípolo promises to reverse the situation. Or at least to try to do so.
The powers of the central banker. The central banker, in short, is appointed by a political party and in some way answers to it. With notable exceptions, in the case where he has a personality capable of withstanding shocks and sufficient competence to go his own way. The most famous of the exceptions was certainly Mario Draghi. He rose to the top of the ECB in the midst of the financial debt crisis, after the famous whatever it takes to save the euro Draghi has worked for an expansionary monetary policy never seen before. Thus coming to clash on several occasions with his “great electors” such as Germany and France. And through the analysis of his figure and his work we can also understand well who is, and what he does, a central banker.
The future of Brazil, and of the Global South. These maneuvers, as we have seen, help recovery and employment, therefore the middle and lower classes. But in the long run, as often happens even if it is not a direct consequence, they can push inflation. And the future of Brazil will be played on this ability to stimulate public policies without the currency losing value.
But there are foreign interferences ready and everything. An orthodox, moderate liberal economist, not coming from Lula’s Workers’ Party, Galípolo must however deal with those foreign interferences that have always cast black wings on their plan condor over the whole of Latin America. They are very powerful and dangerous enemies. And as history teaches, even the most recent one with the judicial investigations on Lula, they are really ready for anything.
Dictatorship-like regimes at the service of foreign powers. Brazilian monetary policy in recent years, like that of all dictatorships or quasi-dictatorships and ultra-conservative governments in the South of the world, was at the service of foreign powers and large investment funds. For this reason, from the moment of his appointment, the large economic employers’ newspapers began with preventive attacks.
A fair amount of influence on the destinies of the world. They do not want to miss the opportunity to continue to exploit the Brazilian golden goose to their advantage. That is why the future of the Lula presidency, of the whole of Latin America and by extension of many of the countries of the South of the world, will also depend on the capacity of Governor Galípolo to act. As we have seen, central bankers have a fair amount of influence on the destinies of the world.
* Luca Pisapia – Valori.it
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– 2024-09-12 22:47:47
