With his administration under fire for the Jose Dirceu scandal, Brazil's Lula Di Silva takes further steps towards his promised challenge of the IMF and the Washington Consensus: While Lula has thus far remained above the domestic fray among his ministers, he threw down the gauntlet against the IMF and other international institutions when he met with Argentine President Nestor Kirchner in Rio de Janeiro on March 16. The presidents of South America's two largest economies jointly released "The Declaration of Cooperation On Cooperation for Economic Growth with Equality." It demanded that the international financial institutions act "sensibly" and that they end the deep contradictions between the economic demands they place on the developing countries and the countries' real needs for sustainable development. The two presidents stated "this financial architecture requires mechanisms to avoid causing the crises that have afflicted Latin America." As a step in this direction Lula and Kirchner asserted that investments in productive infrastructure projects should not be included as part of regular government expenditures. Brazil and Argentina called on the other full and associate members of the Mercosur trade bloc--Uruguay, Paraguay, Bolivia, Peru and Chile-to sign on to the declaration... In December, Brazil extended a billion dollar loan to Venezuela to enable it to purchase Brazilian goods it urgently needed. Conservatives in the Bush administration fear an emergent alliance of Cuba, Venezuela, Brazil, and now Argentina as Nestor Kirchner works with Lula to challenge the political and trade policies of the United States.