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New political map creates economic uncertainty in Chile



New political map creates economic uncertainty in Chile

Composition of the constituent assembly of Chile, tasked with drafting a new constitution that will bury the legacy of the dictatorship of Augusto Pinochet (1973-1990). afp_tickers

This content was posted on May 19, 2021 – 21:02.


Chile’s new political map, following the election of a majority of left-wing independent members to the Convention, which will draft a new constitution, has opened up an economic scenario of uncertainty about projected changes.

Over the course of the year, the Convention will be challenged to counter the modernization of the ultra-liberal model that has boosted Chile’s positive economic performance, leading to talk of a “Chilean miracle” demanding social equality that has driven the population to the streets in recent years.

Since last weekend’s elections, Chile has plunged into a political tsunami after the arrival at the Constituent Congress of a majority of the non-broad-spectrum leftists, to the detriment of the traditional parties.

The unexpected result caused concern in the market, which reacted in the second with a drop of almost 10% in the Santiago stock exchange, although it subsequently normalized its axis while the dollar fell slightly.

The so-called “People’s List”, formed among the participants in the social protests in 2019, included 27 representatives. Governing Law, 37; while the other two rosters of center-left and radical left groups have elected 53 members, to which are added other independents and 17 indigenous members, creating a 155-member congregation that is highly fragmented, with no coalition alone gaining veto power.

The constituent bases are established 2/3 for decision-making by a majority vote.

“Some things will be changed (in the new Constitution) without any debt due to the composition (of the founder) and the lack of veto power,” said Gonzalo Martner, an economist at the University of Santiago. AFP.

“History shows that this dominance of the radical left does not bode well for any economy, not just the Chilean one. This would not be good news anywhere in the world, ”said a scientist from the Faculty of Private Business and Economics. Diego Portales University, Felipe Balmaceda.

– Economic uncertainty and social hope –

Before the vote, the candidates for the Constituent Assembly focused their economic agenda on some points that reflect the concerns of citizens: an end to the privatization of water supplies; end with the private individual pension model, which is highly questionable due to very low pensions; and the way of exploiting various natural resources, especially lithium and copper.

“Interesting things will happen in the economic sphere. Water consumption by people will, for example, be secured, and public property (resource) will be preserved. But it exists all over the world, what kind of drama we are talking about! “he exclaimed Martner, a socialist economist who served in the government of Concerta, the center-left coalition that ruled Chile 20 years after the end of Augusto Pinochet’s dictatorship.

Martner is on the economic team of the preliminary Communist Party presidential candidate Daniel Jadiu.

It is currently not possible to change the autonomous functioning of the Central Bank.

“Reforms that are known to have failed in the world, such as the separation (pension) system, will move forward,” criticizes Balmaceda.

According to Valentin Karril, Chief Economist for Principal in Latin America, “what can cause difficulties is the large number of independent candidates elected and the ability to bring them into line with certain parts of the Constitution. This means a lot of uncertainty as it is not a monolithic block. “, – said in an interview with the Diario Financiero newspaper.

“My baseline scenario is that there will be uncertainty before the end of the Constituent Congress,” he adds, which is expected in mid-2022.

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The dollar continues to reflect the political scenario



The dollar continues to reflect the political scenario

Yesterday, financial agents evaluated the opposite decision of the Federal Supreme Court (STF) regarding the so-called secret budget. In addition, a decision was made by STF Minister Gilmar Méndez to issue an injunction that would exclude the Bolsa Família from the spending cap rule, with investors trying to understand how this measure would affect the processing of the transitional PEC in the Chamber of Deputies. Oh this PEC!!!!

Since he is an exchange investor, any reading that the budget will be exceeded or become more flexible will negatively affect the exchange market, whether through the PEC or in any other way. We will continue with volatility today.

Looking beyond, the US Central Bank (Fed), although slowing down the pace of monetary tightening at its December meeting, issued a tougher-than-expected statement warning that its fight against inflation was not yet over, raising fears that rising US interest rates will push the world’s largest economy into recession.

The currency market continues to react to political news. The voting on the PEC is saved for today. It is expected that it will indeed be reviewed to open the way tomorrow for discussions on the 2023 budget.

Yesterday, the spot price closed the selling day at R$5.3103.

For today on the calendar we will have an index of consumer confidence in the eurozone. Good luck and good luck in business!!

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Andrés Sánchez consults with the Ministry of Sports, but refuses a political post.



The former president of the Corinthians dreams of working for the CBF as a national team coordinator. He was consulted shortly after Lula’s election.

Former Corinthians president Andrés Sánchez was advised to take a position in the Ministry of Sports under the administration of Lula (PT). However, he ruled out a return to politics. dreams of taking over the coordination of CBF selectionHow do you know PURPOSE.

No formal invitation was made to the former Corinthian representative, only a consultation on a portfolio opportunity with the new federal government, which will be sworn in on January 1, 2023.

Andrés was the Federal MP for São Paulo from 2015 to 2019. At that time he was elected by the Workers’ Party. However, the football manager begs to stay in the sport, ruling out the possibility of getting involved in politics again.

Andrés Sanchez’s desire is to fill the position of CBF tackle coordinator, which should become vacant after the 2022 World Cup. Juninho Paulista fulfills this function in Brazil’s top football institution.

The former president of Corinthians was in Qatar to follow the World Cup along with other figures in Brazilian football. During his time in the country, he strengthened his ties with the top leadership of the CBF.

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The EU has reached a political agreement on limiting gas prices – 19.12.2022



Germany sentenced Russian to life imprisonment for political murder by order of Moscow - 12/15/2021
BRUSSELS, DECEMBER 19 (ANSA). European Union countries reached a political agreement on Monday (19) to impose a natural gas price ceiling of 180 euros per megawatt hour (MWh). The main sources of income for Russia and the minimization of the use of energy as a weapon by the regime of Vladimir Putin.

The agreement was approved by a supermajority at a ministerial meeting of member states in Brussels, Belgium, after months of discussions about the best way to contain the rise in natural gas prices in the bloc caused by Russia’s invasion of Ukraine. .

The value set by the countries is well below the proposal made by the European Commission, the EU’s executive body, in November: 275 EUR/MWh. However, the countries leading the cap campaign were in favor of an even lower limit, around 100 EUR/MWh.

Germany, always wary of price controls, voted in favor of 180 euros, while Austria and the Netherlands, also skeptical of the cap, abstained. Hungary, the most pro-Russian country in the EU, voted against.

The instrument will enter into force on 15 February, but only if natural gas prices on the Amsterdam Stock Exchange exceed 180 euros/MWh for three consecutive days. In addition, the difference compared to a number of global benchmarks should be more than 35 euros.

Italy, the EU’s biggest supporter of the ceiling, has claimed responsibility for the measure. “This is a victory for Italy, which believed and worked for us to reach this agreement,” Environment and Energy Minister Gilberto Picetto tweeted.

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“This is a victory for Italian and European citizens who demand energy security,” he added.

Currently, the gas price in Amsterdam is around 110 EUR/MWh, which is already a reflection of the agreement in Brussels – in August the figure even broke the barrier of 340 EUR/MWh.

However, Russia has already threatened to stop exports to countries that adhere to the ceiling. (ANSA).

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