Lula wins Brazil wage rise fight

Lula says Brazil's future is more important than his own

Brazilian President Luiz Inacio Lula da Silva has won his battle to allow only a modest increase to the minimum wage.

The lower house of Congress voted for an 8% rise to 260 reais ($83).

In doing so, it rejected the increase to 275 reais ($88) demanded by the opposition and passed by the Senate last week.

The president has impressed foreign investors by his willingness to keep a tight rein on the economy, though his popularity at home has suffered.

Lula had said a bigger increase was impossible because of budget restraints agreed with the International Monetary Fund.

We are not thinking electorally, we are thinking about Brazil on a 20-30 year horizon Brazilian President Lula da Silva

"Reason and responsibility over the future of the country won the day," said Professor Luizinho, the government leader in the lower chamber.

"We have to raise confidence so that internal and external investment continues."

The Brazilian stock market rose 1% on the news.

The president and some of his cabinet colleagues travelled to New York on Wednesday to meet executives from some of the world's largest companies.

"We have put in place a policy that will lead to sustainable growth," he told them.

Popularity fall

He also said he expects the Mercosur trade bloc to expand so that all South American countries can negotiate on trade together.

A poll released on Tuesday showed Lula's approval rating fell to 54% in June from 60% in May.

But the president said he was more concerned with the country's long-term future than his own prospects.

"We are not thinking electorally, we are thinking about Brazil on a 20-30 year horizon," he said.