Palocci Resigns

Brazil’s finance minister, Antonio Palocci, finally tendered his resignation yesterday, Monday, after mounting pressure on him to go. He becomes the highest-profile casualty of the bribery and corruption scandal that has plagued Brazilian politics since last June. Palocci, who helped to coordinate Luiz Inácio Lula da Silva’s presidential campaign in 2002, was responsible for moving the leftist PT party towards the center and ultimately into power. Appointed finance minister in 2003 and regarded as one of the main architects of Brazil’s economic recovery, Palocci has been accused of involvement in illegal campaign financing while mayor of Ribeirão Preto in São Paulo state. Despite allegations of wrongdoing, he has enjoyed the full support and backing of President Luiz Inácio Lula da Silva. Meanwhile, ratings agency Standard & Poor’s has said that Palocci’s departure will not hurt the country’s ratings: “The sovereign ratings reflect a broad view of Brazil and its government. Finance Minister Palocci’s policies embodied prudence but, in our view, this was government policy and not the minister’s personal strategy.” A possible replacement for Palocci is Guido Mantega, president of state development bank BNDES.