Brazil's Government Gets Win, But Turbulence Is Not Over - plus55


Despite a victory in the federal spending cap vote, Michel Temer’s administration is still riddled with potential crises
Brazil Opinion

Amid the euphoria created by the approval of the federal spending cap, we could probably say that Michel Temer’s administration has regained its governability. Of course, saying that a government lacks governability is a bit of an oxymoron – one cannot exist without the other, as Dilma Rousseff has proven. According to an index of political support developed by the newspaper Estado de S.Paulo, Temer has an extraordinary support base of 83 percent of Congress. “Stronger than Lula’s,” said the paper. And once the economic crisis has been overcome, it will only grow stronger.

It is not reasonable to fight the data. The government has indeed received a major victory, but politics is a dynamic game. As we say in Brazil, the film is more important than the photo. And the long-motion picture of Temer’s administration is filled with moments of conflict, bone-headed moves, and structural problems that cannot be overlooked. And that’s precisely why we should be careful when measuring how much support his administration actually has.

It is a fact that Brazil is more stable than it has been. The new economic team – including the Central Bank, the National Development Bank, and Petrobras – seems far more solid. The trio is backed by both the government and the markets, while Dilma Rousseff’s economic team was a derailed mess. However, the Brazilian economy is far from recovered, and the political establishment is still haunted by tension and uncertainty. Congress resembles a powder keg, where a single spark risks blowing the entire thing up.

Structural flaws remain present, and Brazil’s economic model must be significantly changed. Interest groups must be confronted, the status quo must be altered, and neither is simple to undertake. Our presidential regime remains the same, dependent on coalitions that are frequently corrupt. Operation Car Wash has demonstrated the collapse of our campaign funding system. Last but not least, there are no capable leaders.

This brief summary should be enough to restrain our enthusiasm. As we dig deeper, the situation becomes even worse. Sectors of the public administration are in an open war against each other, from federal prosecutors to the president’s cabinet, Congress, and the Supreme Court. The latest raid against the Senate Police demonstrates this problem clearly.

President Temer’s congressional ally base is not a uniform front, and cannot work as a united group. First and foremost, this is because the group consists of true reformists and anti-reformists, and they have always benefited from pork-barreling practices. But there is a deeper issue: the 2018 presidential election. The government’s group has no consensual name to run for office in two years. Instead, three high-profile names (Senator Aécio Neves, Foreign Affairs Minister José Serra, and São Paulo Governor Geraldo Alckmin) are battling each other to be on the ticket. Having three candidates is as good as not having any.

In that context of internal war, these groups will fight in the upcoming months with their eyes on the election for the next Speaker of the House, which is scheduled for February.

If the president’s plate weren’t already full enough, there is also the ghost of Eduardo Cunha, the former Speaker, and the plea bargain he is currently negotiating. Already in prison, Cunha has many reasons to reveal what he knows about the corrupt schemes being run in Brasília. And there is Odebrecht, Brazil’s largest construction company, which has 50 executives collaborating with Operation Car Wash.

The scandal doesn’t need to touch President Temer to create chaos. The mere threat of new plea bargains, as well as new accusations against senior government officials, is enough to complicate his administration.

The turbulence is far from over, and could get worse. It is true that we now know more about the government’s problems than we did a few years ago. Perhaps Brazil is reaching the point where it can fix many of its issues, but regardless, this is not the time for euphoria.