Concerns over Reforms May Dissipate with Bolsonaro’s Release
The honeymoon between President Bolsonaro and the business and financial communities is not over, but the first signs of discomfort are becoming clear, as seen last Wednesday, when Ibovespa fell 3.7%, its worst result since the May 2018 truckers’ strike.
There is hope that if the President is discharged from hospital this week, as expected, many of the reasons for such uneasiness could soon dissipate.
Bolsonaro checked into a São Paulo hospital January 27 for surgery to remove a colostomy bag and his stay there was supposed to last one week.
Although he seems to be recovering well, he has had some episodes of fever as well as a diagnosed pneumonia that have postponed his release.
In the meantime, the government seems to be without guidance, with several instances of infighting among cabinet ministers, his inner circle, and the lawmakers that support him.
Many of the disagreements emerged when a draft of the pension overhaul bill was leaked to the press. It is a very ambitious proposal, received with enthusiasm by the markets. Soon after, many in the government began to stress that there had been no final decision on the bill’s content, which would only be decided by the President.
The most worrisome struggle appears to be between Bolsonaro’s sons and Vice President Hamilton Mourão, who has been much more proactive than they would like him to be and has made symbolic gestures that have displeased them.
For instance, the Vice President received leaders of CUT, the workers’ union historically associated with former President Lula and the Workers’ Party, in a meeting at Planalto Palace. CUT has been an anathema to Bolsonaro’s inner circle.
Another reason for concern are the public disputes between the political and economic teams about the reforms.
The only relevant piece of legislation formally presented to the public was Justice Minister Sergio Moro’s package to toughen measures to fight organized crime and corruption. He is the most popular member of the government and most voters have reacted quite well to his proposals.
But many politicians are lukewarm because several campaign finance practices they have used for decades would be outlawed, and some of their privileges as elected officials would be stripped if the bill passes.
In sum, there is tension in the air, much of which is probably caused by concerns about Bolsonaro’s recovery, but he will need to settle these quarrels quickly and definitively if he wants to be successful in office.
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