Brazil’s Lula reaches three months in office mired in multiple crises; find out what they are

By Silvio Ribas

After being forced to postpone his trip to China with a large entourage of politicians and business people, initially planned for last Saturday, President Luiz Inácio Lula da Silva (PT) is completing three months in office marked by crises and frustrations.

In his almost 90 days in office, he has accumulated several conflicts in Congress, within the government, and in society, which need to be resolved soon to preserve the country’s governability.

Lula is in a hurry to solve the crisis.

Unemployment has gone up, the economic growth estimates have worsened, the fiscal anchor project has not even been presented, and the opposition has been able to get arguments to validate its criticism of the government.

So far, six impeachment petitions have been filed in the Chamber of Representatives.

This scenario is stimulated by the many polemics generated by the president’s public reactions.

The most recent crisis was Lula’s statement questioning the smoothness of a Federal Police investigation launched on Wednesday (22), which unraveled a plan by the criminal organization First Command of the Capital (PCC) to kidnap and kill authorities, including Senator Sergio Moro (União-PR) and his family.

“I’m going to find out what happened because it is visible that it is a frame-up by Moro,” Lula said during an agenda at the Itaguaí Naval Complex on Thursday (23).

The illusion was seen as an attack on the work of the Federal Police and the judge in charge of the case, Gabriela Hardt, from Paraná, and prompted repudiation notes from federal career associations.

By saying that the operation was a “frame-up,” Lula further aggravated the crisis by discrediting Justice Minister Flávio Dino (PSB-MA), who had been aware of the investigation for 45 days.

He also contradicted PT president Gleisi Hoffmann (PR), who said it was “very good to see the Federal Police acting independently.

Another of Lula’s crises occurred one day before the PF operation was launched.

In a live interview with the portal Brasil 247, the president said that he felt like taking revenge on Moro while he was imprisoned in the Federal Police jail in Curitiba between 2018 and 2019.

“Every once in a while, a prosecutor would come on a Saturday or a week to visit and see if everything was alright, three or four would come in and ask, ‘is everything alright? I am here to take revenge on these people,'” said the president.

Moro was the one who first convicted Lula of corruption in the Sítio de Atibaia case.

After the sentence was confirmed in the second instance, the PT member was arrested.

LULA FAILS TO BROADEN THE BASE IN CONGRESS

But the list of imbroglios goes beyond these episodes and gains more dramatic contours when one sees the Planalto’s difficulty building a solid parliamentary support base.

The lack of broad support in Congress makes even more challenging the already complicated definition of a substitute mechanism for the government’s spending cap and the proposal for tax reform.

Without progress on these two points, the government continues without credible prospects for improving the economy’s declining indicators and increasing its popularity.

Proof that Lula has not managed to secure enough votes for his projects in Congress lies in the Planalto’s inability to dissuade congress members from establishing a Mixed Parliamentary Inquiry Commission (CPMI) dedicated to investigating the January 8 vandalism at the Three Powers headquarters.

The prospect is that its installation will occur after Easter, in the first session of Congress this year.

In the same way, the articulation of the minister of institutional relations, Alexandre Padilha, and government leaders failed to prevent 16 of Lula’s ministers from being called to explain different House controversies.

The main highlights are depositions that should take place in the Chamber’s Control and Inspection Commission (CFC), led by the opposition.

• Flávio Dino was invited to explain to the deputies his visit to the Complexo da Maré in Rio de Janeiro;
• Carlos Lupi, Minister of Social Security, will speak about unauthorized union discounts in payments to retirees;
• Carlos Fávaro, who heads Agriculture, was invited to speak about invasions of productive private lands by the Landless Rural Workers Movement (MST);
• and Marina Silva, of the Environment, about having said at an event that 120 million Brazilians are hungry and about the record deforestation in the Amazon in February.

“They will come to the collegiate in April, except Marina, who should speak in May”, informed the commission’s president, congresswoman Bia Kicis (PL-DF).

MARKET TENSION WITH PLANALTO’S ATTACK ON THE CENTRAL BANK INCREASES

Lula and his close allies, such as the president of the PT, Gleisi Hoffmann (PR), also took up an ostensive campaign against the actions of the president of the Central Bank (BC), Roberto Campos Neto, demanding an immediate cut in interest rates.

However, the Monetary Policy Committee (Copom) defined on Wednesday (22) the maintenance of the basic rate at 13.75% per year.

The note released by the Central Bank after the decision firmly warned that, to contain inflation, this high level may continue for a “prolonged” period.

This tension between the government and the monetary authority has been causing negative impacts on Brazilian assets in the financial markets.

On Thursday (23), the main index of the B3, the Brazilian stock exchange, plummeted 2.29% and closed the day at the lowest level since July 2022, at 97,926 points.

The dollar rose 1.17% to R$ 5.299, and future interest rates advanced.

This pressure from the political wing of the government against Campos Neto hinders the interests of the Minister of Finance, Fernando Haddad (PT).

The head of the economic team, even though he agrees with the complaints, is trying to establish an institutional dialogue with the president of the Central Bank and with Congress leaders, with an eye on the economic reforms under his responsibility.

But Haddad is already giving signs that he may be missing the chance to find a negotiated way out.

“I found the Copom statement very worrisome because it even signals the possibility of raising interest rates, which today are already the highest in the world,” Haddad lamented.

The crises also prosper when many of the solutions suggested by Lula’s allies to deal with them are postponed or rejected by the president, making the scenario even more complicated.

INSTITUTIONAL CRISIS BETWEEN SENATE AND HOUSE

In addition, Lula’s government has to deal with an open war between the presidents of the House, Arthur Lira (PP-AL), and the Senate, Rodrigo Pacheco (PSD-MG), over the rite of passage of provisional measures (MPs).

The confrontation escalated last week with Pacheco’s decision to force the immediate installation of committees to analyze the MPs.

The prompt reaction of Lira, who talked to Lula on Friday (24), will unfold in new episodes, without knowing the Planalto’s real capacity to cool tempers.

Lira defends that the texts of the provisional measures be taken directly to the House’s plenary session and, if approved, be voted on in the Senate.

This configuration, adopted since the beginning of the pandemic, gives more power to the president of the House, who has control over when and which MPs will be voted on.

On the other hand, Pacheco defends the idea that the processing of an MP should be done through a mixed commission, where deputies and senators debate the text sent by the Executive to be later voted on by both houses – as provided for in the legislation.

The Lula government is divided on the issue because it does not have enough support in the House and is worried about the risk of losing the validity of the measures issued since January.

They are valid for 120 days and expire if not approved within this period.

These MPs include the most important actions of the government so far, such as the recreation of ministries, the new values of the Bolsa Família Program, the Minha Casa Minha Vida and Mais Médicos programs, and the initial efforts to reduce the fiscal deficit of more than R$200 billion foreseen for 2023.

The solution to the institutional crisis seems distant if one considers the degree of animosity between the two houses of Congress.

“It is not the president of the House who has space in the government and needs to give satisfaction. If anyone has room in the government, it is the Senate, which can’t get in the way of the government’s life or the country’s”, challenged the Speaker of the House, revealing the level of antagonism between the two houses of Congress.

Lira has been pressuring Lula to give more resources from amendments to deputies, which were previously allocated in the so-called “secret budget”, as well as nominations for positions in the civil service, autarchies, and state agencies.

In parallel, discussions continue around a Proposal for a Constitutional Amendment (PEC) to change the rite of the MPs.

Lira did not accept the idea of alternating the final word between the House and Senate.

He wants to maintain the current scheme or raise the proportion of deputies in the mixed commission in relation to senators. An agreement is still being built in a more tense climate.

INTERNAL GOVERNMENT SQUABBLES NULLIFY POLITICAL ARTICULATION

Rodrigo Pacheco, who would accompany Lula on the trip to China, also stayed in the country and will have to face one of the crises, the impasse in the voting of MPs.

Arthur Lira has already informed the Supreme Court (STF) and the Senate itself that there is no reason to vote in two different ways simultaneously, the way used in the pandemic and the way that existed before, defined by the Constitution.

He challenged Pacheco to call a session of Congress to debate the issue.

Weeks ago, Lula believed that he would be able to travel to China with Pacheco, Lira, and leaders of the House and Senate, an opportunity to ease crises and speed up priority government projects, such as tax reform and the processing of the mechanism that will replace the government’s spending cap.

Besides frustrating this plan, Lula does not seem interested in at least guaranteeing the autonomy of his Finance Minister. Haddad wanted to propose spending limits before the Copom meeting and Lula’s trip but encountered obstacles within the Planalto, created mainly by the Minister of the Civil House, Rui Costa.

This generated uncertainties on the economic horizon and reduced the space for negotiations in Congress.

Behind the scenes, there are rumors that the clash between Haddad and Rui Costa may reflect the search for a future nomination as a presidential candidate.

According to political analysts interviewed by Gazeta do Povo, Lula has become the main factor in destabilizing his government because he has not yet left the electoral stage and has ignored the urgencies of the moment.

Lula’s challenge will be to defuse these crises.

“From the administrative point of view, the president seemed to have made a composition capable of combining party support and technical capacity, in addition to restarting a routine of elaborating public policies through councils, interrupted in the Bolsonaro government,” assesses Arthur Wittenberg, professor of Institutional Relations at Ibmec-DF.

He says he is intrigued about how Lula’s “unfortunate” statements quickly consume the political capital the president managed to carry out his first government plans.

“Even January 8, which earned him solidarity and support practically unanimously and on an international scale, has been wasted with disruptive gestures,” he said.

For Wittenberg, the big question to be answered today is whether Lula’s political speeches that have generated crises reflect some strategy or are merely rancor.

The near future will tell.

With information from Gazeta do Povo