Colourful president who helped stabilize Brazil dies

SAO PAULO, (Reuters) – Itamar Franco, a flamboyant  former Brazilian president who helped put an end to  hyperinflation in the early 1990s and pave the way for his  country’s current economic boom, died today of  complications from leukemia. He was 81.
Franco, who was also known internationally for a scandal  involving a half-naked model at Carnival that nearly cost him  the presidency, governed Brazil from 1992 to 1994.
He oversaw the implementation of the Real Plan — a bold  economic overhaul that introduced a new currency, slashed  government spending and, in so doing, helped put an end to two  decades of financial stagnation and chaos.
While most of the public credit for the Real Plan went to  Franco’s finance minister and successor as president, Fernando  Henrique Cardoso, leaders eulogized Franco for stabilizing  Brazil at a time when its young democracy was still at risk and  today’s relative prosperity seemed like a pipe dream.
“His contribution was fundamental for the construction of  a democratic, fairer country,” Luiz Inacio Lula da Silva, who  was president until last year, said in a statement.
Brazil’s current president, Dilma Rousseff, declared a  seven-day period of official mourning.
Franco, then vice president, was thrust into the top job  when his predecessor was impeached on corruption charges in  1992. He cast the orderly democratic transition as a triumph —  “The nation can be proud,” he said in his first TV address —  and resisted calls from some in the military, which had just  ceded power seven years previously, to shut down Congress.
Franco’s other challenge was runaway prices. By one  measure, Brazil endured accumulated inflation of an almost  incomprehensible 1,825,059,944,843 percent from 1968 to 1993 —  halting investments and keeping millions mired in poverty.
After pushing several failed economic plans and burning  through three finance ministers in seven months, he named  Cardoso to the job in 1993 with a mandate to stabilize prices.
The Real Plan was nearly derailed during the Carnival of  1994, when Franco, a divorcee with a wild white pompadour,  attended the annual festival in Rio de Janeiro.
Newspapers around the world published graphic photographs  of Franco cavorting with a twenty-something model with no  underwear on, prompting Brazil’s influential Catholic Church to  condemn his behavior. Cardoso later said he was approached by  military leaders who were interested in impeaching Franco.
Franco survived the scandal, and within two years of the  Real Plan’s launch, annual inflation fell to 4 percent.
Franco later served as a governor and senator in his home  state of Minas Gerais. He helped trigger a national financial  crisis and devaluation of the real in 1999 when he turned  against then-President Cardoso, declared a moratorium on state  debts and surrounded the governor’s palace with masked police  to fend off a federal invasion which never came.
Franco was still a senator at the time of his death, which  was confirmed in a statement issued by the Albert Einstein  Hospital in Sao Paulo, where he had been in intensive care.

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