President Lula Of Brasil Blasts Wall Street And London Bankers

'White, blue-eyed bankers have brought world economy to its knees': What the Brazilian President told Gordon Brown
By JAMES CHAPMAN
Last updated at 9:41 AM on 27th March 2009

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Gordon Brown’s efforts to broker an £80billion bailout for world trade on a trip to Brazil hit a stumbling block tonight when the country’s president lashed out at ‘white, blue-eyed’ bankers for bringing the world economy to its knees.

Mr Brown watched on uneasily as his host, President Luiz Inacio Lula de Silva, launched a bizarre tirade in which he warned that next week’s G20 summit in London would be a ‘spicy’ affair.

President Lula said it was completely unfair that the poorest people in the world were suffering most for the mistakes of wealthy, Western financiers.


Luiz Inacio Lula da Silva embraces Gordon Brown after the press conference where the Brazilian president made the comments about 'a crisis that was caused by people, white with blue eyes'

‘This was a crisis that was fostered and boosted by irrational behaviour of people that are white, blue-eyed, that before the crisis looked like they knew everything about economics,’ he declared.

‘Now they have demonstrated that they don’t know anything about economics.’

President Lula, head of Brazil’s main left-wing party, said that ‘no black man or woman, no indigenous person, no poor person’ had been in any way culpable for the global banking crisis.


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Brown to borrow £351billion in the next two years (that's more than Britain's total debt from 1691 to the 1997 election)
‘I’m not acquainted with any black banker,’ he said. ‘The part of humanity that’s responsible should pay for the crisis.’

The president, who apologised for coughing at the start of his joint press conference with Mr Brown because he had been snacking on ‘cheese bread’ immediately beforehand, lavished praise on the Prime Minister’s role in trying to rebuild world economies.

But he said he favoured tougher regulation of the financial sector than Mr Brown and celebrated the chance the crisis gave governments to create a bigger state.

Turning to the G20 summit in London, he added: ‘Normally we are very polite with each other – but this meeting in London, it has to be a little bit spicy, a little bit of heat.’


Mr Brown meets former Brazlian footballer Socrates (left) during his visit at the Pacaembu stadium in Sao Paulo

And Mr Brown also appeared to be criticised from within his own government.

Foreign Office Minister Lord Malloch Brown appeared to issue a warning to the Prime Minister ahead of the G20 summit next week that words needed to be backed up with action.

In an interview with the Associated Press newswire, he said: 'We can't again engage in meaningless, empty commitments which don't survive the flight home.

The global economy is going to go on descending on April 3, the massive destruction of wealth that is going on is not going to be stopped by any leaders' communiqué.'
The Prime Minister included Brazil on his whistlestop world tour ahead of the G20 because it is the world’s tenth largest economy and relatively open to free trade.

He warned that world trade is already shrinking for the first time in 30 years in the latest phase of the financial crisis.

Mr Brown set out plans for an £80billion trade guarantee scheme to try to keep the global economy moving. The fund would involve money from governments, the World Bank and private capital and being used to increase credit flows that underpin trade deals.


Take a look at yourselves: Brown and Lula examine their reflections before the joint press conference

The Prime Minister said that was the ‘minimum’ amount needed to prevent a full-scale collapse in world trade that could prove catastrophic for many economies.
Underwriting world trade deals, Mr Brown said, is the fourth weapon at the disposal of governments and central banks as they try to halt their financial decline.
It follows moves to cut interest rates, use tax cuts and spending hikes as a ‘fiscal stimulus’ and print money, so-called ‘quantitative easing’.
The Prime Minister’s focus on trade came after he appeared to retreat from the idea of another big debt-funded Budget giveaway following Bank of England Governor Mervyn King’s unprecedented warning that Britain could not afford one.

Doubts have also been cast over whether the UK's public finances could stretch to a further fiscal stimulus, if one was required.

Yesterday the Tories moved to exploit the apparent breakdown in relations between Downing Street, the Treasury and the Bank of England.

Shadow Chancellor George Osborne claimed there was now a serious 'crisis' of confidence' at the heart of the Government following Mervyn King's warning that debt was so high there is no room for further tax cuts and spending rises.

He seized on Alistair Darling's refusal to fully back the Bank of England Governor when challenged by a Tory MP in the Commons. Mr Osborne said: 'A dire situation for the Government just got worse.

'When a Chancellor pointedly refuses in Parliament to express confidence in the Governor of the Bank of England, or agree with the statements he makes on the Budget, then we have reached a crisis of confidence in the Government's economic policy and its ability to lead us into a recovery.'

To drive the message home the Tories also released a two-page dossier on the rift, showing that it proved Mr Brown's policies had failed.

Tory Party Chairman Eric Pickles said the intervention from Lord Malloch Brown challenged the Mr Brown's leadership and his stewardship of the economy. 'This Government and its economic policies are falling apart by the minute,' he said.

Brazil is the third leg of Mr Brown's whistle-stop tour, which started with a speech to the European Parliament in Strasbourg on Tuesday before moving on to New York.

However, his efforts to lay the groundwork for the summit have been beset by signs of tension between the US and Europe over how to tackle the downturn.

Czech Prime Minister Mirek Topolanek - current holder of the EU presidency - has branded US President Barack Obama's fiscal stimulus package and financial bail-out 'the way to hell'.


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