Francis Elliott in São Paulo
Watch Brown's earlier drubbing in Strasbourg
Gordon Brown’s efforts to smooth a path to international agreement at next week’s G20 summit in London hit a bump in Brazil yesterday when he was told that the financial crisis was the fault of the “white and blue-eyed”.
President Lula da Silva of Brazil warned that there would be spicy discussions and “tough confrontation” next Wednesday as world leaders faced up to who should pay the costs of the banking crisis.
As Mr Brown looked on during a press conference, Mr Lula da Silva said that action was urgent since it would be intolerable for the poor — who were blameless for the collapse of financial markets — to suffer the most from its effects.
“This was a crisis that was fostered and boosted by the irrational behaviour of people who were white and blue-eyed, who before the crisis they looked like they knew everything about economics, but now have demonstrated they know nothing about economics,” he said, mocking the “gods of wisdom” who had had to be bailed out. “The part of humanity that is responsible should be the part that pays for the crisis,” he added.
His remarks threatened to overshadow the announcement of proposals for a £100 billion injection of finance to kick-start world trade. Mr Brown said that the expansion of credit was the minimum required as exports collapsed around the world.
It already seemed inevitable that world trade would shrink for the first time in 30 years, Mr Brown said, as he called on donor nations and private companies to make new credit available ahead of the G20 meeting.
The Prime Minister also gave more details of how countries found to be engaged in covert protectionism would be named and shamed. Boosting world trade that was free and fair was “absolutely vital” to creating the conditions for a global economic recovery, he said. Officials later said that they expected the International Finance Corporation and World Bank, as well as existing export credit guarantee schemes, to underwrite extra trade finance.
The choice of Brazil, heavily dependent on export income, to announce the new proposals helped to explain Mr Brown’s decision to visit the country before the summit. Brazil also has a better record than most emerging economies in resisting protectionist policies. For his part, Mr Lula da Silva hailed the Prime Minister as a “great brother, a great comrade and a great friend”, before embarking on a lengthy denunciation of the financiers he blames for the downturn.
His colourful language served as a reminder of the diplomatic challenge Mr Brown faces to forge agreement among the 20 largest economies. “Our meeting in London has to be spicy, it has to have a bit of heat,” said the Brazilian leader — in stark contrast to Mr Brown’s repeated claims of an emerging international consensus.
In another piece of diplomatic choreography Mr Brown announced a new deal between England’s Football Association and the Brazilian Football Federation. The FA will oversee the creation of a new refereeing academy in the South American nation.
http://www.timesonline.co.uk/tol/news/politics/article5983430.eceThe media will blame this on Obama.