Opinion – Vinicius Torres Freire: Economy can take away support and time that terrorist plot gave Lula

The terrorist plot of January 8 would have caused an instantaneous democratic communion, a gathering of political and social support that would also benefit Luiz Inácio Lula da Silva. The president, a guarantor of democracy, would have gained more time to establish his government, which began under criticism of the restricted character of what was previously promised to be a “broad front”, in economics and politics.

It is an analysis that is heard around. One can reasonably speculate that there is no time. Neither Lula, nor the democratic country, nor poverty even more degraded by a decade without growth have time.

As if the four years of agitation and propaganda by Jair Bolsonaro were not enough, the two and a half months after the election proved the organization of the coup. To cite the obvious, there were riots before the Federal Police on the day of Lula’s diplomacy, an attempt to bomb the Brasília airport, depredation of electricity transmission towers, movements to block the distribution of fuel and the involvement of the military in the intentona.

A mere beginning of investigation found a coup decree in the house of Bolsonaro’s former Minister of Justice. Far-right parliamentarians, the majority sheltered in the PL, continue to support subversion. In press messages, general officers say they are untouchable.

Opinion polls show that almost the entire 2022 Bolsonarist electorate disapproves of Lula. Desperate, impatient or “third way” Lula voters may become disenchanted. Governing wears out.

It wears out even more in this bad socioeconomic situation. The economy cooled in the fourth quarter of 2022; perhaps it has shrunk. The high interest rate, which will remain so until the end of 2023, the uncertainty about Lula’s economic policy 3 and the world’s sluggishness suggest, for the time being, a 1% GDP growth this year.

The increase in the number of people employed, if it still occurs, will not be enough to reduce the unemployment rate, if at all, with wages likely to stagnate, still at the lowest levels since 2012. Inflation should still increase by almost another 6% this year , at already high price levels.

A tax increase would be almost inevitable, any government, which should be Lula 3’s preferred fiscal adjustment path (with less emphasis on spending containment). It is a yellow sign of conflict, which should not improve with the attempts of business sectors and the professional elite to escape the (necessary) consequences of the tax reform.

Businessmen, in particular Bolsonarists, are already trying to overturn the changes proposed by Minister Fernando Haddad (Finance) in the Federal Revenue Service (Carf) dispute settlement system. The attempt to tax profits and dividends and to collect certain taxes again is a further source of conflict.

The government (and the economy and the environment) needs the return of fuel taxes, cut by Bolsonarist demagoguery. It is a subject that has already excited truck militias and lockouts of transport companies.

In February, Congress returned to function, with leaders re-elected, “empowered” and more willing to extract benefits from Lula (the change in the booty of the rapporteur’s amendments was not digested). There are business parties to feed with positions. To see if the coup threat is still very much alive, police investigations, including Bolsonaro, and a CPI change this scenario.

Several scammers can be encouraged by a loss of prestige by Lula. In order to avoid the risk, (also) the president needs to sweep away the subversion, debolsonarize the country and stop silliness in the economy soon.