The incumbent Administration is extremely concerned about the effects of the WorldCom crisis on Embratel. If the long-distance carrier were unable to discharge its financial commitments, the Government would be obliged by law to cancel its license, renationalize it and reimburse WorldCom for part of its capital expenditure. The leadership of the Workers Party (PT), currently busy preparing to take office in January, has been apprised of the problem and discussed possible solutions at a meeting in Brasília last week. The meeting was attended by President-Elect Luís Inácio Lula da Silva. Neither President Fernando Henrique Cardoso nor Lula wants to be caught on the wrong foot. Besides the acute political embarrassment of having to renationalize Embratel, the expense can ill be afforded at a time of strenuous fiscal austerity. There?s also the matter of national security and the stability of the entire communications system: Embratel satellites are part of a nationwide backbone not just for the main TV networks but also for official intelligence traffic and military communications.
New government
