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Brazil’s testy election race THE FUTURE OF FINANCIAL SERVICES

Published: October 26 2010 23:21 | Last updated: October 26 2010 23:21 Jobs
This special report will examine how new regulations,
Brazil’s presidential election has taken a nasty turn. At a recent rally, José Serra, from the such as the Basel III rules on capital reserves, will be
opposition PSDB party, was hit on the head by a roll of duct tape, supposedly thrown by a game-changing for banking, and how new technology is
supporter of the ruling PT party. “You remember the Nazi’s assault troops?” he sneered, revolutionising the financial services industry.
harvesting political capital for Sunday’s run-off. “This is typical of fascists.” The next day, it was More
Dilma Rousseff’s turn. On campaign in PSDB territory, she was almost hit by a water balloon.

One reason for this burst of aggression is that Brazil’s election race, like all good races, has kept
the drama for last. It grew unexpectedly close after Ms Rousseff failed to win the first round
outright, despite being president Luiz Inácio da Silva’s public protégée. Both candidates have
also said little about their proposed policies, preferring instead vague promises of continuity.
This is politically understandable: every Brazilian wants to prolong the country’s new prosperity.
But it also left the candidates to define themselves only by denigrating the other.

In fact, both are remarkably similar. They are social democrats who believe in market-friendly
policies with a large social component. They are busybody technocrats. They are also
charmless. Both have been compared to Gordon Brown, only without the charisma – a potentially
serious problem. Success in Brasília hinges on the president’s ability to cajole and seduce his or
her party’s coalition partners. Mr Lula da Silva was rich in such talents. Ms Rousseff and Mr
Serra are not.

Where differences do exist, they are slight but significant. Mr Serra is more of a fiscal hawk.
Hopefully, he would stop the use of off-budget schemes recently deployed to meet fiscal targets.
Trimming public spending, still rising fast despite a red-hot economy, would also bring down
interest rates and so limit currency appreciation. Ms Rousseff favours a bigger state, although a
fifth of public companies already count it – one way or other – among their top five shareholders. LATEST HEADLINES FROM CNN
On foreign policy, Mr Serra would be less indulgent towards Iran, Venezuela and Cuba than
Brazil has been. Ms Rousseff has also only just recovered from cancer. Extinction threat for fifth of vertebrates
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Yet the biggest difference, perhaps, is the role Ms Rousseff’s wildly popular benefactor will play if
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she wins – as is likely, given her 10-point lead in polls. A parallel presidency, like Mr Putin’s in
France threatened in alleged Bin Laden tape
Russia, is possible; so too is Mr Lula da Silva’s return to office in 2014 and 2018. If only to
interrupt this relationship with power, Mr Serra is the better choice for Brazil. More

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