Lula wants to use the Brics bank to bail out Fernández in Argentina

President Luiz Inácio Lula da Silva (PT) has sought to use his political influence to get the New Development Bank (NBD), also known as the “BRICs bank”, to grant loans to the government of Alberto Fernández in Argentina. In addition to Brazil, the institution comprises the other member countries of the bloc, such as Russia, India, China and South Africa.

In this strategy, Lula has had the support of former president Dilma Rousseff, who since March has presided over the institution based in Shanghai, China. The petista was nominated by Lula in a maneuver for Marcos Troyjo, who had been nominated by former president Jair Bolsonaro (PL), to leave the post.

“We are working on a comprehensive line of financing (for Argentines). It makes no sense that Brazil loses space in the Argentine market, because these (countries) offer credit and we do not”, said Lula after the meeting with Fernández at the Itamaraty.

Fernández, in turn, called Lula a “friend” and said that the request for help was more than natural in this moment of crisis. “When a friend is in trouble, what does the person in trouble do: ask his friends for help. And friends are always there,” stated the Argentine president.

Lula articulates for the Brics bank to accept the entry of Argentina

Under the current rule, the NDB carries out credit operations only in the bank’s member countries. Since its creation, the institution has granted only one loan to a non-member country, which was to Lesotho, an enclave within the territory of South Africa. But the authorization was given, among other reasons, because the action financed by the NDB was considered fundamental for South African water security.

The other Brics countries consider that an exceptionality for Argentina would create a precedent and other members could start looking to the institution to help neighbors in difficulties. In order to be able to grant loans to Argentina via the Brics bank, Lula is now trying to make it possible for new countries to enter the bloc’s financial institution.

Defending the entry of new members into the bank has been one of Dilma Rousseff’s flags since she assumed the presidency of the institution. In her inauguration speech, the PT affirmed that “the expansion in the number of members of the bank would strengthen our capital base”.

“Our objective, in expanding the number of countries, is to seek even greater diversity, both in terms of geography and stage of development. NBD’s strategic objective is to become the leading development bank for emerging markets and developing countries,” said Dilma.

In 2021, amid the institution’s intention to expand its reach, the NBD board approved the entry of the first three participants from outside the original acronym: Bangladesh, United Arab Emirates and Egypt. Uruguay has also already had its participation approved and should be the next to be formalized in the list of associates.

Lula promises package of actions to resume “strategic alliance” with Argentina

Also during the meeting with Alberto Fernández, president Lula stated that the two countries are going to adopt a plan with “almost 100 actions” to resume the strategic partnership. Argentina is Brazil’s third largest trading partner in the world, after China and the United States.

“Today, we adopted an ambitious plan of action for the relaunch of the strategic alliance. There are almost 100 actions that give concreteness to our joint development project”, stated the PT. The Brazilian president, however, did not detail what these strategic actions will be.

Still in the speech, Lula said he was “very satisfied” with the “prospects” of financing from the National Bank for Economic and Social Development (BNDES) for the construction of the Néstor Kirchner gas pipeline. The work will be responsible for connecting the Vaca Muerta gas field, in Neuquén, to the town of Salliqueló, in the province of Buenos Aires.

“I am very satisfied with the positive perspectives of BNDES financing for the export of products for the construction of the Néstor Kirchner gas pipeline”, stated Lula. The PT also said that the Brazilian government will finance the purchase of products from Brazil by the neighboring country through a ”comprehensive line”, without giving further details.

In the action plan, in addition to the study on the financing of exports of Brazilian products and for the construction of the Argentine gas pipeline, there is also the intention to structure and decide on the financing for the export of Guarani armored vehicles to Argentina. The Guarani armored vehicles, produced in Sete Lagoas (MG), by the company Iveco, are the most modern combat vehicles in Brazil, generally used in peacekeeping missions.

Weakened Fernández will not run for re-election in Argentina

Fernández’s meeting with Lula takes place two days after the deadline for registering pre-candidates in Argentina. Politically weakened and with the country facing one of its worst economic crises, Fernández withdrew from running for re-election.

In addition, the current president broke with vice president Cristina Kirchner, the main leader of Peronism, the political current of the current government. After a turnaround, the governing base announced Sergio Massa, current Minister of Economy, as a pre-candidate. Massa is Cristina’s ally.

Argentines face a serious economic crisis, with the devaluation of the local currency and high inflation rates. Annualized inflation is at 114%. With that, the Argentine president sees in Lula’s help a way of trying to give muscle to his political group’s candidacy this year.

Fernández’s agenda in Brazil also included appointments this Monday with the President of Congress, Senator Rodrigo Pacheco (PSD-MG), and with the President of the Federal Supreme Court, Minister Rosa Weber.