When The “Master economy of Latin America” meets The “Master Economy of the Euro-zone”, you have to expect something big behind the scene.
Dilma arrived in Hannover, Germany on Monday 5th of March. Rousseff visit to Germany aimed to discuss 2 main issues among others:
- Economy issue: Currency war against Brazilian Real.
- Culture issue: The bilateral relationships between the two giants including IT, culture, innovation and education system.
- Currency war:
Rousseff had described the flow of foreign investment to Brazil as a “liquidity tsunami” that is worrying Brazil. Rousseff argued that the developed countries have injected around 8.8 trillion dollars to financial markets, which helps to devalue the currencies of those countries while it Brazilian Real has appreciated about 7% in 2012, which effecting in loss of competitiveness for Brazilian exports and an influx of imported goods.
However, to protect itself from this “tsunami” “Brazil as a sovereign nation will take all necessary measures to protect its economy,” she said.
Brazil showed lower economy figures in the beginning of 2012, where Brazil’s weak industry slows Once-Booming Economy.
Indeed few days after, Brazil announced a raise in transactions tax to limit foreign investment inflows.
From her side, Merkel told in a news conference that.
“I made it clear that this is a temporary measure,”
And as Brazil would take part in a recapitalisation of the IMF, which could in turn help boost crisis funds for the euro zone.
“The president said Brazil will take part in a refinancing in proportion to its quota,”
And Rousseff confirmed this by saying:
“We have been in favour of boosting IMF funding and bigger Brazilian participation since the G20 meeting in Cannes (last November),”
- Culture and Education Agreement:
On the 6th of March, Dilma and Merkel opened Technology and Digital Innovation Fair in Hanover (CeBIT).
Also, President Dilma Rousseff signed a cultural agreement with the City of Berlin, the German capital. Under the terms of the agreement, Brazil and Germany will maintain a partnership involving Universities and cultural institutions, promoting exchange and training for professionals.
Germany is considered a privileged partner by Brazil, it’s 5th largest trading partner after China 15.3%, United States 9.6%, Argentina 9.2%, Netherlands 5.1%, Germany 4.0% (according to 2010 statistic).
between 50s and 60s, the German government responded to requests from President Juscelino Kubitschek and provided incentives to establish an automotive industry in Brazil.
On the 29th of March, Dilma will travel to New Delhi, India for the BRICS summit where she will discuss the emerging markets future.