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“Brazil’s Black Wednesday”

“Brazil’s Black Wednesday”

Dilma After at least a week of negotiations, former Brazilian President Luiz Inácio Lula da Silva (‘Lula’) accepted yesterday morning president Dilma Rousseff’s invitation to join the government as a minister. This morning, Lula took office as Chief Cabinet (Casa Civil) minister, the most important ministry in the Brazilian Executive: the holder of this post assists the President of the Republic directly in the coordination of government policy and actions.

The events between Lula’s acceptance and his taking office, however, can be decisive to the fate of the government which may, indeed, be on the verge of crumbling ahead of a presidential impeachment vote. Demonstrations erupted in Brazilian cities following the nomination of Lula, who has been struck by the Lava Jato corruption investigation involving state-oil giant Petrobras and dozens of congressmen and businessmen. Further demonstrations across the country have appeared today, at the very moment he was sworn into office.

Demonstrators and opposition alike understand Lula’s appointment yesterday was meant to shield Lula from prosecution. As a minister, Lula will now enjoy “privileged forum”; a form of legal privilege where he may only be prosecuted by the Supreme Federal Court (STF), therefore freeing him from the reach of the Lava Jato magistrate. Also on Wednesday, the Federal Police disclosed wire-tapped telephone conversations between Lula, the president and her then chief of staff, Jacques Wagner. The content of these tapes, widely distributed in social networks, can be inferred as compromising the president to the extent it can be interpreted that she was working to obstruct Justice in favor of Lula. The disclosure of these tapes, however, is now under heavy criticism by jurists as well as, of course, the government.

During Lula’s swearing-in ceremony as minister this morning, which confirmed two other new ministers (Justice and Civil Aviation); and Jaques Wagner as Dilma’s personal chief of staff, the president energetically spoke out against the Lava Jato judge in what she called an 'act of aggression against democracy, the Constitution and the rule of law'. Outside of the Planalto Palace, where the ceremony was held, and in other Brazilian cities, demonstrations continued and they may strengthen throughout today.

Just as this note was written, a Federal District judge in Brasilia issued an injunction suspending Lula’s appointment to the government. The government will appeal the injunction, and considers it to be politically motivated. At the time we write it is unclear the status of Lula or his legal privilege.

“Superminister” Lula – if he can take office - is an attempt to avoid presidential impeachment proceedings in the next few weeks and so save the Dilma government. It has been described as “her last roll of the dice”.

Former president Lula was a far more notable political coordinator and leader than Rousseff, with strong political dealmaking skills (especially with the Senate) and Dilma hopes Lula might avoid or delay any further split in her coalition in Congress. She may also have hoped his appointment would calm demonstrations down. However, Lula does not enjoy the same levels of popularity (almost 90%) when he left his second four–year mandate in 2010, and today’s Brazilian economy is but a faint picture of what it was during his presidency. Dilma’s PT’s party has also soared in unpopularity, so it takes more than Lula and his party to fix troubled Rousseff’s predicament. Speyside evaluates Lula will have but a short time to accomplish his task (2–4 weeks). Legislative recess in July, the Rio Olympic Games in August; followed by municipal elections in October will surely divert attention and might drag impeachment–related actions deep into 2017. Threatening drivers and variables, on the other hand, will be surrounding Brasília, as new compromising materials Lava–Jato are likely to be released; street demonstrations may increase and economic recession is set to deepen.

Opposition parties are seeking to freeze Lula's nomination, and have already filed a lawsuit at the Supreme Court. Social movements (such as Movimento Brasil Livre, Vem Pra Rua, Aliança Nacional e Revoltados On Line) are trying to organize a general strike for March 21. These movements claim approximately 11,000 entrepreneurs have agreed to it. On the other side, several pro-government demonstrations took to the streets yesterday, and more of these demonstrations, supported by social movements linked to the federal government, are scheduled for this Friday at 5pm.

In the meantime, political paralysis shall escalate, while decision-making related to the economy and other major issues of interest of Brazilians – but not necessarily of a government struggling for survival – will remain on the side.

Brazil has entered a dangerous and fragile stage and there can be no certainty of outcome; or even of a peaceful process to an outcome, as the streets gain a momentum faster than the institutions of the constitution.

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Stephen Lock
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