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There is no honeymoon, no patience, no good education. There will not be. Acid rain began to fall on Luiz Inacio Lula da Silva long before January 1, when he should have take the power of the second hemispheric economy.

This politically harsh landscape builds up from a exaggerated reproach from the markets to what will come, to the groups of fanatics with the Bible in their hands who pray in front of the barracks for a shot to bring down the new president before he is sworn in.

The surreal scene is completed with the official party filming the alleged electoral fraud without evidence and the high-ranking military man insulting the next president and his officials on the networks. All this with Jair Bolsonaro taking advantage of his last days in power to appoint his men to key positions with excessive power intention to hinder the management of the PT.

That arsenal of tribulations has categories, by the way. Trump’s flimsy taunt about voting isn’t the same as the distrust emitted by the stock market.

The latter drift is partly explained by errors of the PT command which are followed with barricade speeches and keep the secret the future Minister of the Economy and the team that will accompany him. This strategy is difficult to translate, but its negative effects are evident.

One of the points of friction on which part of the turbulence has mounted is the request by the Lulist leadership for a regulatory framework (Proposal for constitutional amendment – PEC) which makes it possible to raise the ceiling on public spending.

In Brazil, a law imposed by an ally of Lula, Henrique Meirelles, links the increase in these expenditures exclusively to the inflationary evolution. Bolsonaro broke that mark on at least three occasions in 2020, 2021 and 2022 for extraordinary figures. Even the transfer market punished him, even if he was lenient on some occasions.

stock protest

In October last year, the stock market recorded a decline of 7.28% in seven days, the worst weekly result since March 2020 in the worst of the pandemic. The reason was funding from the Auxilio Brasil program, a Bolsonaro version of Lula’s Bolsa Família, which increased the subsidy from 300 to 400 reais ($80) at the height of the disease crisis.

The near-race eased only when the economy minister, the ultra-liberal Paulo Guedes, announced he would not resign. The stock had dropped 4.5% in a single day, convinced traders that the Treasury team would be disarmed by such a challenge.

But Guedes himself, this year, before the elections, validated another additional social spending of 8 billion dollars wrested with an apology from Congress. The minister made this clear without hesitation the purpose was to improve the president’s image in view of the elections. The markets, in silence.

Lula and Bolsonaro barely matched in campaigning on the promise that this subsidy will be kept next year. It originally expired on December 31st. But the president-elect says Aid Brazil, to be renamed Bolsa Família, it must have a base of 600 reais, 120 dollars.

Bolsonaro’s budget it does not include such funds. Furthermore, no lines are foreseen for other programs that appeared on the way to the polls, such as help for women heads of households or assistance of 150 reais for every poor child under 6 years of age, a segment that grew by more than 22% between 2020 and 2021 . .

Brazil faces poverty of about 23.7 percent of the population measured in large cities, according to a study by the Pontifical University of Rio Grande do Sul, among other organizations. There are also 33 million homeless people with hunger problems.

Lula’s interest in starting his government with that chapter resolved goes beyond solidarity with those sectors to which he largely owes his vote. There is a political motivation which suggests that it is necessary to extinguish the fuse social bomb or at least lengthen it so that it does not complicate the adjustment path that the Brazilian economy needs.

Lula governed with a fiscal surplus during his two terms. To repeat that merit, among other harsh measures, for example, must replenish taxes that Bolsonaro withdrew from fuels to force an artificial drop in inflation ahead of the election.

That reversal will hit the cost of living in a year when growth shrinks severely due to the fiscal cliffs the new administration will inherit. It is no coincidence that Lula is surrounding himself with economists who come from the time of creation of reality and deemed it orthodox to try to command those tensions.

The market knows this, but its extreme sensitivity is based on the fact that the increase in government financing requirements will collide with a global situation of high interest rates which make money more expensive and therefore there will be difficulty in attracting resources. Anything can happen in that trap.

The name of the future finance minister is essential to exorcise those ghosts. Also to prevent the future government from being trapped in an extortion game against a Conservative lineage congress with which every step must be negotiated.

Markets are tending to calm down lately after Fence Barracks economist Nelson Barbosa anticipates it requests for extra resources would be reduced. This data combined with the resignation from the transition teams of former Finance Minister Guido Mantega, a developer with judicial inhibitions and a complex history.

A former official of Lula, Mantega managed the economy during the failed government of Dilma Rousseff which ended in an extraordinary crisis, with a two-year decline in GDP and the outbreak of a social fury that paved Bolsonaro’s presidential road. It is not strange that Lula never talks about that government.

Pragmatism

Another fact of the moment, no less, was the PT’s silent but strident endorsement of Brazil’s Ilan Goldfajn to chair the IDB, a senior IMF official who had been proposed by Bolsonaro, and who Mantega tried to demolish with alleged management with US Treasury chief Janet Yellen.

There will certainly be other portions of pragmatism attentive to the complex political scenario that awaits the new president. Bolsonaro he’s heaping hawks and authoritative gestures to build from now on the toxic style that the opposition will have as soon as the leader of the PT takes office.

The chicana of the Liberal party in government denouncing the ballot boxes, crushed by the courts in a few hours, is part of a recipe for keeping active the groups of fanatics who are demanding in the streets the outgoing president who He did not acknowledge his defeat.

Bolsonaro also encourages this disorder to highlight who is leading the opposition. An internal battle within the Brazilian right which has just begun but which will be fought on the shoulders of the next government. These power plays embody serious distortions.

A few hours ago an audio was released by one of the magistrates of the Federal Court of Auditors, Augusto Nardes, who, in contact with top management in the agri-food sector, affirms that there are “movements” in the barracks and that “it is a matter of hours, days a maximum, a week, two, maybe less”, for a “Very strong result in the nation”.

This coup or anti-democratic tone, which is also seen in the street demonstrations or checkpoints that still persist to a lesser extent, is also confirmed by active officers of the Armed Forces. the portal of state He cited the case of coronal Alberto Ono Horita, former commander of a parachute battalion and head of the Military College of Curitiba, the district where Lula was tried.

In a personal account, under the name Patriot_PQD (short for paratrooper), the military shared messages with Bolsonaro supporters who disqualified Lula as a “nine,” the derogatory pseudonym his enemies use to call the PT leader who lost a finger when he was a metalworker.

Subsequently, on October 30, after the electoral sentence, the same colonel published a photo of Bolsonaro with thanks and the word “Shame” for the results. In a string of 39 messages, he went so far as to describe the president-elect, future head of the military, as a “thief”. Ono Horita was not alone. Two other military leaders also expressed themselves in militant tones in favor of Bolsonaro.

The president, in turn, accumulates decrees days after leaving the government. Among these, he has appointed an adviser to his wife Michelle, at the consulate in Orlando. But dating more controversial Until now they have been in the strategic Commission of Public Ethics, where he placed Celio Faria Junior, a former Navy officer, and Joao Henrique Nascimento de Freitas, an ally of the president’s most controversial son, Flávio Bolsonaro.

They are irremovable positions, they last three years and with the possibility of accessing confidential data and investigating without objection the first echelon of the next government. In the last stretch of his mandate, Bolsonaro insists on squeezing democracy.

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