Brazil's new president spends first full day in office

Brazilian President Dilma Rousseff began her first full day in office Sunday after pledging to build on the policies of her hugely popular predecessor Luiz Inacio Lula da Silva.

Brazil's President Dilma Rousseff is honored by outgoing President Luiz Inacio Lula da Silva after receiving the presidential sash outside Planalto Palace in Brasilia January 1, 2011.
Brazil's President Dilma Rousseff is honored by outgoing President Luiz Inacio Lula da Silva after receiving the presidential sash outside Planalto Palace in Brasilia January 1, 2011.

The 63-year-old divorced grandmother, who was Lula's former cabinet chief, assumed the presidency Saturday in a carefully staged ceremony under at times rainy skies.

Her Sunday's agenda includes meetings with Prince Felipe of Asturias, the heir to the Spanish throne, Uruguayan President Jose Mujica and Palestinian president Mahmud Abbas.

Later, she plans to confer with her finance and foreign ministers.

During Saturday's inauguration ceremony, Rousseff received from Lula the green-and-gold official sash and gave her first speech to the nation.

"I will look after the most vulnerable. I will govern for all Brazilians," she said in the televised address from the palace's balcony.

Lula himself pointedly left her alone in the spotlight, save for a brief heartfelt hug.

Required to step down after serving the maximum two consecutive terms permitted under Brazil's constitution, Lula has not said what he plans to do in retirement.

But he commented weeks ago that he was a "natural born politician" who would not rule out maybe trying to return to the presidency after Rousseff's four-year mandate was over, depending on the performance of the woman he helped get elected.

In her swearing-in speech before Brazil's Congress, Rousseff repeatedly paid homage to her mentor, calling him a "great man" and vowing to maintain his legacy, notably in reducing poverty and promoting economic prosperity.

"The most determined struggle will be to eradicate extreme poverty," she said, declaring: "We can be a more developed and fairer country."

Rousseff outlined plans for tax reforms, environmental protection, improved health services, regional development -- and unspecified measures to combat foreign "speculation" that could upset Brazil's economic growth.

On the face of it, Rousseff is taking over an economy in great shape.

Brazil's economy grew an enviable 7.6 percent in 2010, it enjoys recently discovered oil finds that could make it a big-league exporter, it has won a significant role on the world stage, and it is preparing to host the 2014 football World Cup and 2016 Olympics.

But challenges loom.

Growth is expected to slide to 4.5 percent in 2011, inflation is well above the government target at an estimated 5.9 percent and rising, and an aim to cut public debt from 42 percent to 30 percent is likely to meet resistance, not least because Brazil desperately needs more and better infrastructure.

Brazil's currency, the real, has more than doubled in value against the dollar during Lula's eight years in power, and looks set to rise further, undermining the competitiveness of Brazilian exporters.

Rousseff, a left-wing former guerrilla who was tortured in prison in the 1970s for opposing the then-military government, will also inherit a diplomatic row with Italy.

On his last day in power, Friday, Lula refused to extradite an Italian former militant, Cesare Battisti, convicted of four murders in the 1970s.

A furious Rome had withdrawn its ambassador in protest and warned it would up the pressure to have Battisti handed over.

Rousseff has much to do to fill the big shoes of the previous president, whose shadow will likely fall over most, if not all, of her mandate.

A former trade union leader, Lula deftly employed his negotiating skills in international diplomacy and to stay firmly in charge of the ruling Workers Party.

His genuine man-of-the-people demeanor translated into an 87-percent popularity rating by the end of his government.

Rousseff, in contrast, has never before held elected office and largely persuaded voters to give her the presidency on the strength of her promises to continue Lula's policies.

Brazilians were willing to give her the benefit of the doubt.

"My heart is divided. Lula was a statesman, a very charismatic man who represented the working class, and all of us are sad to see him go," said Maristela Leal, a teacher come to watch the handover ceremony.

"I feel better represented by Lula than by Dilma. But I have a lot of hope for her, and I think it's important to have a woman as president," she said.

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