By RUI ABREU*
The path followed by Fernando Haddad and by implication by the Lula government is to give up on the political dispute
2024 ended heated by the arrest of a four-star coup general and the political discussion about the spending cut package. The market also made it known through its talking arms (corporate media) that its tolerance at the beginning of the term (extended by the neo-fascist coup attempt) had ended.
TV channels, newspapers and portals have voiced their bosses' claims that they are continuing the coup that began in 2016, now demanding that a leader identified with the left continue neoliberal policies. Fernando Haddad fed the vampires' voracity by presenting a package that punishes the poorest population, President Lula's social and political base, which has provoked strong opposition from the left and has not satisfied the ever-satiable market.
Much less than an allusion to Lenin's critical work on the Mensheviks, this provocatively titled nano-contribution focuses on the mid-term moment of Lula's four-year term, its successes, mistakes and the meaning of governance.
To remember is to understand
Due to a lack of ingenuity or because the course of history does not give them relevance, speeches or quotes that have the ability to revisit us are rare, but there is one that has echoed in Brazilian society since it was delivered on August 31, 2016. I am obviously referring to Dilma Roussef's post-impeachment speech, in which one passage in particular has been a footnote in Brazil's recent history: "The coup is against the people and against the nation."
The coup that began in 2016 and continues to this day aims to transfer income from labor to capital, constitutionally and legislatively anchoring an increasingly neoliberal model. After three and a half terms of PT government, national and international elites decided it was time to accelerate the exploitation of the Brazilian people, making trillions of reais earmarked for social policies, public companies and salaries available to dissatisfied markets. The draining of resources from the Brazilian economy to billionaires reached a new level. The vampires' banquet was taking place once again.
Immediately after the impeachment, Michel Temer's government, putting the coup into practice, limited the State's ability to implement social programs, provide services and make public investments with the Spending Cap Amendment Proposal. It continued with the labor reform that further unbalanced production relations, creating a sea of precariousness where working hours, salaries, career plans and employment contracts are crushed, making available to capital yet another slice of wealth that belonged to workers.
The reform of secondary education also opened up a wider market in education and paved the way for the dispute over the educational and social future, in which the far right is the standard bearer of backwardness, while capital occupies more space in a strategic sector of the economy and society. It initiated the pension reform that was approved in November 2019, during the government of Jair Bolsonaro. Working with less conditions for longer were goals pursued and achieved by the coup governments. It tied the price of fuel to the international market, guaranteeing astronomical profits for shareholders thanks to the efforts of the Brazilian people.
Paulo Guedes dynamited the civil service and promoted widespread poverty among the population. The privatization of companies in strategic sectors accelerated. Petrobras, Eletrobras and other energy companies added to the billionaires' menu, while water supply, sewage treatment and other public service companies also fell into private hands. The holy alliance between agro-extractivism and finance took shape in increasingly larger public resources and increasingly larger profits. From 2016 to 2021, the share of wages in GDP fell by 13%, from 35% to 31%, while the share of profits rose from 32,3% to 37,5%.
While the people were rapidly becoming poorer, returning Brazil to the hunger map, with half of its population reaching some level of food insecurity, the profits of banking and agribusiness were skyrocketing, Brazilian billionaires and others entered or rose on the list Forbes, Petrobras was the company that distributed the most dividends to its shareholders worldwide. The vampires feasted!
But none of these measures would be new, after all, the coup promoted by national and international billionaires “…was against the people, against the nation.” The actors and actresses were also well-known, as was the institutional architecture of the coup (with the supreme court, with everything), the same that Bolsonaro would later question by attempting a coup within the coup. And it was in a context of economic instability for those who work and institutional instability for those who lead that we reached the 2022 elections, this time without Lula’s unjustified imprisonment. The hope of a crushed people seemed to return with Lula’s freedom to run in the elections. It was necessary to do the L to change the path of surrender and impoverishment of the population that the economy was taking, it was necessary to do the L to contain the fascist path that politics was taking. And the people, hoping to defeat the coup, did the L.
Two forward, two back
Elected by a broad front, Lula personified the people's desire for change in their lives, which the coup governments had made more difficult. Proposals such as combating hunger, repealing the spending cap, exempting income tax for those earning up to R$5, ending the PPI on fuel, and proposing new labor and tax legislation stood out in a somewhat mushy campaign (typical of a broad front). His speech also advocated restoring public control of strategic companies and expanding the Bolsa Família program with an additional R$150 per child. These objectives were joined by two demands that the news of January 2023 demanded: eradicating the neo-fascist coup and ending the centuries-old genocide of indigenous peoples.
There were many hopes for the latter with the creation of the Ministry for Indigenous Peoples, an election promise formally fulfilled by the presidency, but its performance has left much to be desired, with repeated cases of abuse, land seizure and death of indigenous peoples without any major involvement from the minister. As for the attempted coup, the choice of Múcio Monteiro as Minister of Defense proved to be a step towards yet another political and judicial amnesty for the usual coup plotters in uniform. Two bad ministries with bad results.
Among the successes, the recovery of several social programs, such as Auxílio Gás and Farmácia Popular, and the expansion of others, such as Bolsa Família, stand out. This effective increase in families' consumption capacity mitigated the food problem, removing more than ten million people from a situation of severe food insecurity, taking Brazil off the hunger map.
These policies were only possible in a context of fiscal pacification, in which the deficit was disregarded (officially 2,2% in 2023) and the R$145 billion transitional PEC was removed from the same calculation. Real wages grew little, but they did grow, and GDP will reach close to 3,5% in 2024. It is important to emphasize that these adjustments were only achieved outside the logic of fiscal austerity. If we add the transitional PEC plus the official deficit for 2023, it would give a total deficit of approximately 3,5%, which is substantially different from the zero deficit target for 2024 set out in the Fiscal Framework.
Among the many government shortcomings caused by the balance of power and the lack of initiative to change it, the Fiscal Framework has proven to be the worst economic policy that the government has developed during this term. It has designed a new spending cap that, according to Minister Fernando Haddad, will be incompatible with social commitments: those constitutionally assumed with regard to education and health, but also policies of subsidies and social support.
To defend the goals set out in the Fiscal Framework for 2024, the Ministry of Finance presented a mixed package in which the proposal for income tax exemption for those earning up to R$5 appeared as the major positive development, accompanied by several cuts in the social area: BPC, salary bonus and the appreciation of the minimum wage. All in the name of the zero deficit enshrined by Minister Fernando Haddad in the Fiscal Framework and the neoliberal vision that supports an economy that has increasing inequality as its objective.
Regarding what would be the government's second worst legislative initiative, only behind the one that originated it (Fiscal Framework), the spending cut package immediately received the heaviest criticism from both the left and the right. The far right hypocritically used its good relations with organizations of people with special needs to defend the continuation of the criteria for access to BPC, while the left warned about the social and political cost of measures that punish the government's social support base.
The economy as a whole is also endangered by such measures, removing millions of people from the economic cycle in its consumer sector, who are now somewhat protected by state support and subsidies. The Fiscal Framework and its ramifications are already beginning to destroy what was economically achieved in the first two years of government and in the long term it is a fundamental instrument for the consolidation of the 2016 coup.
Is the continuation of the neoliberal coup a defense against the neofascist coup?
The spending cuts package has sparked a debate on the left that seems set to continue through 2025 and will shape the political and electoral situation until 2026. In the name of containing neofascism, should the government give in to billionaires trying to isolate the far right? Should the government continue the coup, further incorporating neoliberalism into the legislation, trying to gain the support of the elites in preventing neofascism from returning to power?
In all fairness, the system that has been consolidated politically and ideologically in Brazil in recent decades is neoliberal. Neoliberalism is increasingly anchored in Brazilian legislation, and the conduct of the legislative and judicial branches in defending the interests of billionaires is undeniable, while the executive branch gives contradictory signals. Even electing a government that was entirely left-wing, it would be difficult to change the economic bias of the government. But a government that seeks to improve the living conditions of the working class must inevitably confront the limits of the system, even if in the end only liberal measures are approved by Congress. Only by telling the truth can one dispute the opinion of the social majority that one wants to win over. Only then can the balance of power be changed.
Unfortunately, the path followed by Fernando Haddad and, by extension, by the Lula government is to give up on the political race, with the Finance Minister blatantly lying to the Brazilian people when presenting the spending cuts package. The package is bad and brings immediate cuts to the people (so much so that President Lula vetoed part of the bill after objections). The improvements will only be debated in Congress this year and, if approved (which I do not believe), will only come into effect in 2026.
The PowerPoint presentation was unequivocal about the cuts that would be made. Graphs illustrated how much the minimum wage would lose in its appreciation, and charts showed that the rules for accessing benefits would be tightened. After all, Minister Fernando Haddad preferred to speak with Faria Lima; it was a presentation made for the market. In the same vein, President Lula made a national announcement introducing Gabriel Galípolo as the new president of the Central Bank, in which he assured that it would be the presidency with the most autonomy that the Central Bank has ever had.
The president is clearly speaking to the market, trying to appease the billionaire appetite of the vampires. The strategy of personalizing the discussion about the Central Bank, placing Campos Neto as the personification of the extortionate interest rate policy, has its days numbered with the appointment of Gabriel Galípolo. It was a lost opportunity to discuss the role of the Central Bank, whether it defends the public interests of the population or the private interests of billionaires. Let's hope that the majority appointed by the government to lead the central bank changes the interest rate policy, because if Galípolo continues the same policy, the government will have no arguments left.
The government's liberal drift is being challenged even within the parties that support it. The left of the left wing of the parties is beginning to offer criticism and an alternative path in the internal discussions of the PT and PSOL, and even candidates for party leadership with a different economic proposal. Unfortunately, this movement is not expected to gain enough strength, and a change in the neoliberal economic policy proposal seems unlikely. Furthermore, there is a mistaken assessment of the results of the municipal elections that sees the right-wing support as the response to the electoral defeat, a solution that is further inflamed by the state of the conclusion of the legal proceedings of the neofascist coup plotters.
Meanwhile, neofascism does not sleep and continues to do its work as an indoctrination ant with Bolshevik discipline, which is what we have been lacking. Churches and police, with the support of local politicians, are building neofascism from the bottom up, winning the population over to increasingly violent views against the poor, working-class, and mostly black population.
But the neoliberal elites are endorsing this entire path, validating figures like Tarcísio de Freitas as a presidential candidate, corroborating the genocidal Zionist policy of Israel and its US sponsor, and even referring to Javier Milei as an economic example to follow. Those who support the genocide in Gaza will have no trouble of conscience when they see a poor person being thrown off a bridge by a police officer. The Netanyahu standard sets the level of violence in capital's offensive against labor throughout the world. The Brazilian bourgeoisie applauds the results.
There will be many aspects of governance to analyze, particularly in international politics, which has a gravitational relationship with national politics, but that will be for a brief reflection in the future. For now, it is worth considering that the 2016 coup gave rise to neofascism and that its continuation will only lead to one of two situations in the near future: the return of neofascism to power, reinforced by the economic failure of the “left” government, or the emergence of a movement within and/or outside the parties that support the government that pushes governance to the left and confronts the neoliberal limits of the system, preventing Lula and his government from continuing the coup, the one that is against the people and against the nation.
*Rui Abreu was elected mayor by the Left Bloc in Oeiras and Lisbon.
Reference
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