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Last Updated: Thursday, 8 September 2005, 03:17 GMT 04:17 UK
Embattled Lula vows more reforms
President Luiz Inacio Lula da Silva during the Independence Day parade
Independence is one of the few things Lula can celebrate
Brazilian President Luiz Inacio Lula da Silva has promised to press ahead with his economic policies despite the scandal that has engulfed his party.

In an address marking Independence Day, he pledged to investigate corruption allegations against the Workers Party and to punish those found guilty.

The party has admitted receiving millions of dollars in illegal funds.

Lula has seen his own popularity ratings fall, although he has not been directly implicated in the scandal.

"Brazil is bigger, much bigger than all this and we cannot lose the economic and social opportunity that we have built at the cost of so much sacrifice," he said in his address.

In the same way we won the fight over the economic crisis... we will overcome, with courage and calm, the current political turbulence
Luiz Ignacio Lula da Silva

"It is a characteristic of the Brazilian people to fight against adversity and overcome it," the president added.

The scandal over campaign funding and alleged bribes for votes in Congress has dominated Brazil's public life in recent months.

The accusations have damaged the government's chances of re-election next year and held up a programme of economic reforms.

But Lula said: "In the same way we won the fight over the economic crisis and we are winning the fight of the social divide, we will overcome, with courage and calm, the current political turbulence."

In recent weeks protesters have expressed disillusionment at Lula and his government's pro-market economic policies.

His critics again took to the streets on Wednesday, in anti-corruption marches to coincide with Independence Day.

In Sao Paulo, thousands marched beneath a banner which read: "The Country Is Ours, Let's Fight For It".

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