Pension reform becomes Temer’s sole priority
President Temer starts his last year in office seemingly obsessed with pension overhaul, long considered to be the key element for Brazil’s fiscal health in the near and medium terms.
The downgrading of the country’s credit rating by S&P was justified by the delay in passing the social security bill, which was expected by the end of last year when it would have taken place if the JBF scandal had not hit the President in May.
Now, despite all efforts by Temer and his closest allies, chances for an approval by the supermajorities required by the Constitution grow dimmer with each passing day as we get closer to October’s general elections.
Very few lawmakers demonstrate the will to risk their reputation in the eyes of voters by passing a measure as unpopular as this to please a President whose approval rating is in the single digits.
To make matters worse, most of the efforts to try to ensure support for the bill consist of huge new expenses that further aggravate federal government deficits.
Other initiatives to garner support have been also frustrating for Temer, such as cabinet minister reshuffling that has been barred either by court decisions or by political intrigue, reinforcing the general impression that the President is isolated.
Social tensions could increase next week, when an appeals court decides on former President Lula’s appeal of his conviction in the first of six graft trials he faces.
If the court upholds the conviction, Lula may be barred from running in the presidential election. He is currently the frontrunner according to all public opinion polls, holding around one-third of voters’ preferences. But Lula is also the most highly rejected of the presumed candidates, with more or less 40% of all voters saying that they would never pick him.
Either way, the court’s decision could inflame the already bitter divisiveness among Brazilians towards Lula. This will be of no help to Temer in his attempt to see pension reformed passed by March. If Temer does not succeed as intended by then, he will be deprived of his flagship government initiative: cleaning up Brazil’s fiscal situation.
All hopes and attention from then on will focus on the campaign and the decision of who will succeed him.
The views and opinions expressed in The Pulse are PATRI’s own and do not necessarily reflect the views and opinions of the Brazil-U.S. Business Council. For additional information please email Carlos Eduardo Lins da Silva, at firstname.lastname@example.org.More Testimonials