BRASILIA, Sept 14 (Reuters) – Brazil’s tourism minister resigned on Wednesday over allegations of ethics violations, a departure that President Dilma Rousseff hopes will signal the end of months of scandals and negative headlines.

The resignation of Pedro Novais — the fifth cabinet member to resign in just over three months — is a reminder of the political volatility that has undermined Rousseff’s administration as she struggles to contain unrest within her ruling coalition stemming partly from fiscal belt-tightening.

But Novais’ departure is likely to bring some relief to Rousseff as she tries to distance herself from the corrupt, sleazy style of politics that has been portrayed by a series of media reports on the Tourism Ministry under Novais’ command.

A steady stream of scandal allegations has eased in recent weeks as Rousseff has moved to patch up relations with her biggest coalition partner, the PMDB, of which Novais is a member.

In August, police arrested 33 Tourism Ministry officials and entrepreneurs in a corruption sweep tied to funding for major sports events [ID:nN1E7781XF].

Novais also made headlines for allegedly having claimed payments made at a sex motel as official expenses.

In the latest allegation against him, Novais was accused in newspaper reports this week of having used public funds to employ a maid and a chauffeur for his wife while he was congressman from 2003 to 2010.

BRASILIA/NEW DELHI, Sept 14 (Reuters) – Brazil’s proposal to support the crisis-hit euro zone garnered only lukewarm support from fellow BRICS countries on Wednesday, as doubts mounted whether the five emerging market powers have the political will or financial clout to throw a lifeline to Europe.

Brazil’s president, Dilma Rousseff, reiterated on Wednesday that her country was ready to join an international rescue effort, a day after officials said Brazil was in preliminary talks with the four other members of the BRICS group — Russia, India, China and South Africa — to make coordinated purchases of bonds of euro zone countries.

Aides for Brazilian Finance Minister Guido Mantega had said he would contact his BRICS colleagues to gauge the level of support before they meet on Sept. 22 on the sidelines of meetings of the World Bank and International Monetary Fund in Washington.

But doubts quickly emerged whether the diverse group would have the political will to come up with a plan with enough financial muscle to make a real difference as the possibility grows of Greek debt default.

A central bank adviser in China urged Beijing on Wednesday not to buy large amounts of euro area bonds, and South Africa’s finance minister suggested his country might not have the financial firepower to support a bond-buying plan. India said it was “cautious,” and Russia appeared to dismiss the proposal.

Russian President Dmitry Medvedev’s chief economic adviser, Arkady Dvorkovich, told Reuters that the Group of 20 would be a more appropriate forum to address the euro zone crisis [ID:nL5E7KE2MG].

Greece said so far BRICS countries had shown little interest in covering the country’s borrowing needs through the T-bill sales program. “Despite the invitation, we have found there was little or no participation at all,” Deputy Finance Minister Filippos Sachinidis told radio station Real FM.

BRASILIA/NEW DELHI (Reuters) – The BRICS emerging economies are considering offering support to the euro area, possibly by buying bonds, although doubts emerged that a significant plan would materialise.

A central bank adviser in China urged Beijing on Wednesday not to buy large amounts of euro area bonds and South Africa’s finance minister suggested his country might not have the financial firepower to support a bond-buying plan.

Greece, the most perilously placed euro zone country, also expressed scepticism.

“We have invited all the countries that you have mentioned (Russia and China) to take an active part in covering the country’s borrowing needs through the T-bill sales programme,” Deputy Finance Minister Filippos Sachinidis told radio station Real FM. “Despite the invitation, we have found there was little or no participation at all.”

Despite its shut-out from bond markets, Athens still holds monthly T-bill auctions to cover short-term borrowing needs.

The BRICS — Brazil, Russia, India, China and South Africa — will discuss what they can do next Thursday on the sidelines of meetings of the World Bank and International Monetary Fund in Washington, said R. Gopalan, Economic Affairs Secretary to India’s Finance Ministry.

Speculation is mounting that Greece could default on its debts and even exit the 17-nation euro zone.

BRASILIA/NEW DELHI, Sept 14 (Reuters) – The BRICS emerging economies are taking tentative steps to offer support to the euro area, possibly by buying bonds, although doubts emerged that a significant plan could materialise.

A central bank adviser in China urged Beijing on Wednesday not to buy large amounts of euro area bonds and South Africa’s finance minister suggested his country might not have the financial firepower to support a bond-buying plan.

The so-called BRICS — Brazil, Russia, India, China and South Africa — will discuss what they can do next Thursday on the sidelines of meetings of the World Bank and International Monetary Fund in Washington, said R. Gopalan, Economic Affairs Secretary to India’s Finance Ministry.

The euro zone debt crisis has roiled global markets for more than a year with financial bailouts for Greece, Ireland and Portugal. Speculation is mounting that Greece could default on its debts and even exit the 17-nation euro zone monetary union.

In preliminary talks, the BRICS discussed increasing their holdings of euro-denominated bonds to help ease the debt crisis, a senior Brazilian government official told Reuters on Tuesday.

However, analysts suggested bond buying would not fly.

“The magnitude of the European crisis is so large,” said Abheek Barua, chief economist at HDFC Bank in New Delhi. “Unless there’s sort of massive buying, then it won’t make a difference.”

BRASILIA (Reuters) – The BRICS major emerging economies are in preliminary talks on increasing their holdings of euro-denominated bonds to help ease Europe’s debt crisis, a senior Brazilian government official told Reuters on Tuesday.

The talks are still in a “preliminary stage,” said the source, who asked not to be identified because the negotiations are ongoing. The BRICS group comprises Brazil, Russia, India, China and South Africa

The official said any action would not involve “the majority” of countries’ reserves, but did not provide additional details.

Another government official said Brazil did not intend to use its around $355 billion in international reserves to buy European debt but could use its sovereign debt fund, which is allowed to take on more risky investments.

The sovereign fund had a value of 15.4 billion reais ($9 billion) in August, most of which was tied up in stock investments. The source said it could receive a capital boost from the Treasury as part of any assistance plan.

Brazilian Finance Minister Guido Mantega said finance ministers and central bank presidents from the BRICS members would discuss the euro zone crisis at a September 22 meeting in Washington.

“We’re going to meet next week in Washington, and we’re going to talk about what to do to help the European Union get out of this situation,” Mantega told reporters in Brasilia.

BRASILIA, Sept 6 (Reuters) – Brazil vowed on Tuesday to defend its domestic industry against unfair competition and slapped import tariffs on select Chinese steel products.

It is the latest in a series of measures to defend struggling domestic manufacturers and help shield Latin America’s largest economy from the fallout of global financial turmoil.

The Latin American economic powerhouse will impose an anti-dumping tariff of $743 per tonne on steel pipes, the government’s foreign trade chamber said. The levy will be valid for five years.

The pipes are used in Brazil’s oil and gas industry, which is booming following big hydrocarbon discoveries in recent years.

The move is part of a broader effort by President Dilma Rousseff, who took office on Jan. 1, to get tough on imports and protect domestic jobs.

“(We) will never allow foreign goods using unfair competition against our products,” Rousseff said on a nationally televised address on the eve of Brazil’s Independence Day.

“In the current crisis our main weapon is expanding and defending our internal market,” she said.

BRASILIA/SAO PAULO, Sept 1 (Reuters) – Brazil’s shock interest rate cut has raised concerns that the central bank is letting its guard down on inflation and caving in to government pressure to help cushion an economic slowdown.

The hefty cut in the benchmark rate to 12 percent from 12.5 percent at the central bank’s monetary policy meeting on Wednesday comes as inflation in Latin America’s largest economy is running at 7.1 percent.

Some economists are now questioning the bank’s commitment to pulling inflation back down to its target.

Although it cited the darkening global economic outlook, the rate cut comes as Brazilian manufacturers suffer from a strong currency and as government officials step up calls for a reduction in the country’s lofty rates.

“We see this decision as setting a dangerous precedent for monetary policy in Brazil, which goes against the inflation-targeting regime that has existed for 10 years,” said Tony Volpon, Latin America strategist for Nomura.

The split decision to cut rates for the first time in two years was a shock turnaround in policy in response to growing signs of a slowdown at home as the global economy flirts with crisis. Only weeks ago, many economists were expecting a sixth straight rate hike this year.

The bank’s policy committee, known as Copom, said it was concerned that a sharpening slowdown in the global economy would worsen a deceleration under way in Brazil, which grew a robust — but unsustainable — 7.5 percent last year. It said it saw inflation risks diminishing.

BRASILIA, Sept 1 (Reuters) – President Dilma Rousseff’s main challenge in coming months will be to maintain a course of austerity and clean government amid growing dissatisfaction as Latin America’s largest economy slows.

She will have to face rebellious allies, who could stall her legislative agenda and approve costly bills that may undermine fiscal discipline. Other risks include resistance to long-term structural reforms, persistent inflationary pressures, and renewed intervention in currency markets.

SCANDALS

A series of scandals that have forced four of Rousseff’s ministers to resign in less than 3 months has exposed her government’s vulnerability to opposition and media scrutiny. It has also renewed tensions within Rousseff’s ruling coalition, partly because she fired many officials before concluding an official inquiry.

Agriculture Minister Wagner Rossi resigned in August after intense media coverage alleging he peddled influence and used an agricultural firm’s corporate jet. The wave of resignations began in June when Rousseff’s chief of staff, Antonio Palocci, stepped down over an ethics scandal [ID:nN08245414].

If Rousseff, 63, continues her “clean-up” in other ministries and state agencies, as her aides say she intends to, the career civil servant risks losing support from some allies who expect to get “perks” from government contracts and posts.

Already her coalition had been plagued by in-fighting over key government posts and cuts in pork barrel spending that legislators traditionally use for public works projects in their constituencies. Her refusal to make political appointments to key jobs angered her main ally, the PMDB.

BRASILIA (Reuters) – Brazil’s central bank slashed its key interest rate to 12 percent from 12.5 percent on Wednesday in a shock decision that it said reflects a mounting global slowdown as well as weaker growth in Latin America’s largest economy.

The sharp 50-basis-point cut risks fanning investor worries about stubborn inflation and reviving concern about government influence in monetary policy after a series of comments by senior officials pushing for a rate cut in recent days.

In a split decision, the central bank’s monetary policy committee, Copom, voted five to two to trim the so-called Selic rate by 50 basis points, following five consecutive increases earlier this year. It is Brazil’s first rate cut since July 2009.

Explaining its decision, the committee said it saw a “substantial deterioration” in the international outlook as the United States and Europe struggle with debt and anemic economic growth. It said the slowdown in developed economies was likely to be more prolonged than previously expected and could hit Brazil’s economy through weaker trade and investment flows and tighter credit.

All 20 analysts in a Reuters survey had expected the central bank to keep the Selic rate unchanged. The decision also surprised investors — interest rate futures had been reflecting expectations of steady rates or at most a cut of 25 basis points.

“I think it’s a huge mistake. They gave in to political pressure,” said Tony Volpon, economist and Latin America strategist at Nomura Securities in New York.

“The central bank is making a bet that it is 2008 all over again but central banks shouldn’t be in the business of making bets,” he added, referring to the 2008 financial crisis.

BRASILIA, Aug 31 (Reuters) – Brazil’s government presented a 2012 budget to Congress on Wednesday that foresees a rosy economic outlook and a lower budget surplus target, raising questions about its commitment to fiscal discipline.

The budget proposal assumes 5 percent GDP growth next year, far higher than economists’ consensus forecast of 3.9 percent and a contrast with mounting signs of a sharp slowdown this year. An optimistic growth outlook risks overestimating tax revenues, which are expected to rise by 7 percent, and could force a new round of budget cuts next year.

The government also lowered its primary budget surplus target — revenues in excess of spending before interest payments on public debt — to 114 billion reais for next year from a revised 128 billion reais this year.

The proposal contrasts with the government’s message of fiscal discipline in recent days. On Monday it said it would slow spending and increase its primary budget surplus target for this year by 10 billion reais. For more, see: [ID:nN1E77S0II].

“There are contradicting messages. They tell legislators there’s no money to hike civil servants’ salaries and then they propose spending hikes elsewhere,” said Roberto Piscitelli, finance professor at the University of Brasilia.

Budget Minister Miriam Belchior insisted that the government’s budget execution would be far more austere than its proposal.

“One thing is what we send (to Congress), another is the government’s intention,” she told a news conference, emphasizing that the primary budget target could be revised upward next year but that the government wanted to maintain “a margin” to maneuver.