Brazil's Lula Calls for Tax Breaks to Boost Economy

Former Brazilian President Luiz Inacio Lula da Silva called for tax breaks and more consumer credit Monday in an effort to spur economic growth in the politically divided country.

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"It is important to increase investment in this country," the former president said.

"It's possible we have made errors along the way, in stopping making concessions and exemptions, for example, to allow the Brazilian economy to grow. This had costs, the government had to give away almost 15 billion reais (US$4 billion) in tax exemptions to industrial sectors and other areas, in order that we could keep the economy firm."

Brazil's economy, which averaged over 4 percent annual growth during Lula's 2003-2010 presidency, is now on course for its worst two-year downturn in more than a century, according to a weekly central bank survey of economists

The downturn comes during a huge political scandal. Evidence of widespread corruption of politicians from all political parties has been brought to light. Petrobras, Brazil's state-owned petroleum company, has been the epicenter of a bribery scheme that has tainted the careers of many elected officials.

Current Brazilian President Dilma Rousseff has been embroiled in the scandal, with Brazil's right-wing calling for her impeachment. As of now, no evidence proving that she or Lula were involved with the scandal has surfaced.

Many right-wing politicians have called for her impeachment, accusing her of intentionally breaking budget rules to boost spending during her 2014 re-election campaign, which she has denied. The main partner in her ruling coalition appears set to leave the government this week, increasing the chances that she will be pushed out of office.

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Lula was recently appointed as an advisor to Rousseff, in a move that critics say was to shield the former president from investigations surrounding the Petrobas scandal.

Lula said during a news conference with foreign journalists that he wanted to serve as an economic advisor to his successor and political heir Rousseff, regardless of salary or legal protection from lower courts.

Only Brazil's Supreme Court has jurisdiction over elected officials, and one justice temporarily suspended Lula's appointment earlier this week. The court is set to consider the case Wednesday.

For her part, Rousseff maintains that the push for impeachment is nothing less than a coup. She has vowed to not to resign, and says that Brazil's democracy is at stake.

Lula blamed a frustrated opposition and biased national media for stoking hate during recent anti-government protests, which have seen thousands take to the streets in protest.

Many thousands more have responded by demonstrating in favor of Lula and Rousseff. The protests seem to be divided by race and class.