BRAZIL-News from the "front"

“OK, that’s enough! No more Mr. Nice Guy!”

In his union organizing days and his campaigns for the presidency, Lula was referred to often as “Lula, Peace and Love”. However, at the 36^th birthday party of the PT, Lula made it clear that the gloves are now off. He is truly irritated and no longer disposed to be Mr. Nice Guy.

This announcement followed the arrest of his campaign marketing team of João Santana and his wife, Monica. It was also in response to the Lava-Jato and São Paulo public prosecutor’s office investigations of the ownership of two properties: one a triplex apartment in the beach town of Guarujá and the other a country retreat in the town of Atibaia. Lava-Jato is also looking at whether Lula might have used funds from the Petrobrás fraud scheme.

Today, the union movement was out on the street in São Paulo demanding a reduction of interest rates. We can probably expect more such demonstrations as Lula winds up his “machine”.

Many, many moons ago I posted on this blog the question of just how far Lula would go to maintain his hold on political power. We will soon find out!

Some early casualties

Justice Minister José Eduardo Cardozo submitted his resignation for the third time to Dilma Rousseff. This time she accepted it. He has been moved over to the position of Attorney General (in Portuguese: Advogado Geral da União). He will be replaced by Wellington César, a former public prosecutor from Bahia and reportedly a favorite of Jaques Wagner, Presidential Chief of Staff and a Lula loyalist.

Cardozo was reportedly fed up with pressure from the PT to soft-pedal the Lava-Jato investigation and rein in the Federal Public Prosecutor and the Federal Police. Cardozo repeatedly and correctly stated that he did not have the authority to do as requested because the Feds enjoy autonomy with regard to the investigation of crimes and are only subordinate to the Ministry of Justice as regards administrative matters.

The word “on the street” is that the PT (read Lula and Wagner) will increase the pressure on the Ministry and perhaps try to stifle the investigations by reducing funding to the Feds as well as taking to the streets.

Lula has already filed a motion to cancel his scheduled deposition with the São Paulo prosecutor’s office regarding the triplex apartment in Guarujá. He reportedly claimed that the officer conducting the deposition was not the “natural” officer for the task. (I was not aware of the existence of “natural” prosecutors but not much can surprise me nowadays!)

What about Dilma?

Some time ago I reported on an article in the publication Relatório Reservado that claimed that while seeming to be estranged, Lula and Dilma have simply nourished this impression while coordinating strategy in quasi-perfect harmony. Whether that is actually the case or remains so, is still unclear but she did obey the pressure to get Cardozo out of the Justice Ministry.

Three stabilization plans

There are now three economic stabilization plans being bandied about where previously there had been none. 

One is the plan elaborated by the administration under the tutelage of Nelson Barbosa, Minister of Finance. We can call this, “Dilma’s Plan”. 

Another is the “Bridge to the Future Plan” prepared by the PMDB, initially meant to be an internal document for discussion in the party and now a matter of public debate. Release of this plan to the public essentially means an end to the PMDB/PT alliance.

The third plan has been drawn up by the PT and is entitled, “The Future Lies with Getting Back to the Changes”. This rather pompous title is of a plan to get back to the policies that didn’t work the first time around. It criticizes the “Dilma Plan” and the “Bridge to the Future” as being little more than “liberal economics”. The PT wants a reduction of the base interest rate and a 20% increase in the budget of the “Bolsa Família” income maintenance program. 

No one of the 3 plans appears to have sufficient political support to go anywhere! “Dilma’s Plan” does not even have the support of her own party. The PMDB plan, “Bridge to the Future” is predicated on regime change which seems unlikely at this time. And the PT plan is just more of what did not work before and no one is likely to take seriously.

Retail sales continue to decline

Supermarket sales are reported to now be at the volume levels that prevailed in 2010. The overall decline in January was 3.8%. “Essentials” sales such as food, beverages, and personal hygiene items fell 2%. Layoffs and dismissals also continue, most especially in the vehicle sector. Auto companies expect a 20% decline in sales this year.