Lula pressured Tebet to authorize US$1 billion to Argentina and block Milei

President Luiz Inácio Lula da Silva (PT) used the government’s ministerial structure to influence the decision of the International Monetary Fund (IMF) to lend US$7.5 billion to Argentina, which is facing a serious financial crisis. Lula pressured Minister Simone Tebet, of Planning, to authorize a US$1 billion operation from the Development Bank of Latin America (CAF) even with the neighboring country without credit, and give an advantage to the Argentine government candidate in this year’s presidential election. , Sergio Massa, about the main competitor, the libertarian Javier Milei, who has been growing in the polls.

The operation was revealed this Wednesday (4) by the newspaper The state of Sao Paulo. A People’s Gazettethe Communication Secretariat (Secom) of the Presidency of the Republic informed that the content of the report is not valid.

According to the investigation, Lula pressured Minister Simone Tebet, of Planning, to approve a US$1 billion operation for Argentina in the CAF, of which she is governor for Brazil. The country has a 37.3% stake in the institution and a greater influence on decisions.

As Argentina had already reached the CAF credit limit, new access to resources could not be made. However, with Tebet’s approval after pressure from Lula, the majority of member countries approved the measure – except Peru. Thus, the president’s intervention with the “bridge loan” guaranteed the direct transfer of US$7.5 billion from the IMF on behalf of Argentina.

Milei’s rise in the Argentine presidential election worries the Brazilian government due to its proposals for the economy, which has inflation of more than 120% per year. Compared to Jair Bolsonaro (PL) on the political and customs agenda, he defends the dollarization of the country, the exit from Mercosur, the extinction of the Central Bank and the reduction in the size of the State.

Lula and his allies consider Milei’s rise to be worrying and a threat to Mercosur. Milei, who is a friend of Eduardo Bolsonaro (PL-RJ), also criticized Lula, calling him a “socialist with a totalitarian vocation”, and China, describing it as a “murderer’s government”.

The Brazilian government is supporting the Argentine Economy Minister, Sergio Massa, who is a candidate in the election and was in Brasília in August. However, the competition is becoming increasingly difficult for Massa, who represents Peronism.

With the election in Argentina approaching on October 22, uncertainty is increasing, leading Lula to act decisively to avoid the possible collapse that a Milei victory could represent.