Brazil president Lula close to deal with rightwing parties

Brazilian president Luiz Inácio Lula da Silva is close to sealing an unlikely alliance with two rightwing parties formerly allied to his defeated rival Jair Bolsonaro, in a move aimed at strengthening the hand of his leftist administration.

The deal would cede cabinet posts and potentially other roles in return for support in Congress, where the coalition led by Lula’s Workers’ party does not command a majority. After drawn-out talks, final negotiations are expected this week following Lula’s return from a trip to Africa that included the Brics summit in Johannesburg.

Since the three-time leader of Latin America’s largest democracy took office again in January, Brazil’s fragmented and right-leaning legislature has pushed back against elements of his programme, which includes higher public spending and tougher protections for the environment, workers and minorities.

In exchange for leading a ministry each, the Progressive and Republican parties will be expected to furnish votes in the lower chamber for government-sponsored bills. Details are yet to be confirmed and the administration may also offer control of a state-owned bank.

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Alexandre Padilha, a minister and Lula’s chief interlocutor with parliament, said a deal would bring on board forces that had already backed some of the government’s proposals.

“We are strengthening [and] consolidating a political front that can provide even more stability in Congress,” he told the Financial Times. “It carries an important weight [of] parliamentarians and parties who were in the Bolsonaro government and supported him during the election, but have embraced this economic agenda of saving democracy and reducing inequality.”

Despite progress on certain bills – including the passage of looser limits on public expenditure, and approval in the lower house of long-awaited tax reform – Lula has suffered a series of parliamentary defeats. Lawmakers thwarted plans to roll back privatisation of the water and sewerage sector, before stripping powers from the environment and newly created indigenous affairs ministries.

Both parties set to enter the executive are ideologically closer to the ex-president, a hard-right populist narrowly beaten by Lula in last year’s elections. With internal divisions over the alliance, not all their lawmakers are likely to vote in line with the administration.

“I am not interested in government posts and will remain in opposition,” said a member of the Progressives, who asked not to be named.

The agreement for a cabinet reshuffle is nevertheless considered by analysts as a significant boost to Lula’s ability to govern, nearly eight months into his four-year term.

Fernando Schüler, a professor at Insper university in São Paulo, estimated the informal pact could give Lula roughly 320 deputies in the lower house, out of a total 513.

“Lula wants to create a platform for broad dialogue,” he added. “With the reshuffle, he will have a good basis for dialogue and a greater stability in relations with Congress.”

Mr Schuler said this should also lessen the president’s dependence on the speaker of the lower house, Arthur Lira of the Progressives, one of the most influential figures in Brasília who controls voting schedules and impeachment requests.

Mr Lira represents a powerful and amorphous grouping of mostly centre-right lawmakers without a consistent ideology, known as the Centrão or “Big Centre”.

The bloc trades support for plum appointments and resources for its electoral machines. Mr Bolsonaro also formed a partnership with the Centrão, despite having disavowed its transactional style of politics.

The new alliance may concern some investors who have counted on a conservative-dominated Congress acting as a brake on measures perceived as unfriendly to business.

But the fact many lawmakers do not share Lula’s vision could force the president to avoid more radical proposals, according to analysts.

“These parties do not commit to unconditional support, and agenda items will continue to be addressed on a case-by-case basis,” said Wagner Parente, chief executive of BMJ Consultoria. “To secure approval in the [Chamber of Deputies] and Senate, the economic agenda will need to be moderate.”

Nor does Lula’s bargain mean he will be able to rely on durable support, analysts said. At the start of his mandate, he handed three ministerial roles to the centre-right União Brasil, but many of its number have already gone against the administration.

“It is a model of very transitory loyalty and does not guarantee that the major reforms will be passed,” said Esther Solano, professor of international relations at the Federal University of São Paulo.

Brazilian presidents also have at their disposal discretionary budget grants that can be awarded for lawmakers to spend in their constituencies, often used as a means to secure votes in congress. But the price extracted has been rising – the government released a record monthly amount of R$11.8bn ($2.4bn) in July, according to non-governmental group Association of Open Accounts.

– Additional reporting by Beatriz Langella

– Copyright The Financial Times Limited 2023