§ Mr. KidneyTo ask the Chancellor of the Exchequer what assessment he has made of the effectiveness of the United Kingdom's contribution to Brazil's financial rescue package, with particular reference to the impact of the adjustment policies required of the Brazilian Government on Brazilian citizens. [87882]
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§ Ms HewittFinancial tensions in Brazil have eased significantly following the IMF-led international financial support package agreed last year, and this has allowed Brazilian interest rates to fall. The UK Government directly contributed $11 billion to the financial support package. The UK will continue to play an active role in monitoring Brazil's performance under its IMF programme. Continued adherence under the IMF programme is essential if the recovery in investor confidence is to be maintained.
The IMF programme requires Brazil to narrow its large fiscal deficit. This fiscal adjustment will have a negative impact on growth in the short term but it is necessary if stability is to be restored. Macroeconomic stability is an important precondition for a sustainable economic recovery which will raise living standards and should benefit all sections of society. The Brazilian Government, the IMF and the World Bank have worked together closely to ensure that the impact of the adjustment programme on the poor and vulnerable is minimised. The World Bank have undertaken a number of projects in Brazil with a social dimension.