no-confidence vote

Leda Catunda - Scaly - 2021
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By LUÍS FERNANDO VITAGLIANO*

The paradox for Lula and time for Roberto Campos Neto.

In addition to campaign promises (predictability, credibility, stability) the Brazilian economy needs confidence and credit. Cheap credit, with low interest rates, to get companies up and running, occupy idle capacity and generate confidence that the investments made have the capacity to return. With the dispute instituted in the Central Bank's interest policy, confidence is undermined, credit stagnates at high costs and the president of the Central Bank, morally defeated by his conservative position, achieves his objective of boycotting the Lula government in its attempt to resume the economic advancement of the country.

Roberto Campos Neto knows he is the master of time in this move. He doesn't need to win. But his time is different from the government's time. He can give in to Lula; we suppose four or five months from now, and lower interest rates. Or download slowly over long period. Whatever, the result will be the same: indicating that it will take time to restore credit to the market and insinuate that the economy is sluggish.

The delay is the biggest sign that economic recovery is far away for this government and announces the imminence of political defeat. Therefore, it is not important to know if interest rates will drop, but when they should. Roberto Campos Neto thus achieves two objectives, shortening Lula's term to four years and creating better conditions for economic recovery for the successor of the PT candidate, who is certainly supposed to be a member of the Bolsonarist camp.

For the current government to escape this trap, meet the promises of economic improvements that were presented during the election and make the population that supported it credible, it takes boldness in the leadership to drastically change the economic direction. This is the sore point of the economic question. It is not a discussion that lasts for months, because with a few months of stress in the market, little credit and low confidence, 2023, 2024 will fade away as well as the ability to face this clientelistic and physiological Congress.

The next COPOM meeting, scheduled for 45 days from now, does not provide any sign that it will cut interest rates by 1% or 2%. The less there is any sign that the monetary authority has any plan to review the spread Bank officer. Official bodies such as Caixa Econômica Federal, Banco do Brasil and BNDES are not in a hurry to present lines of credit to small and medium-sized producers, or to associate training for new ventures associated with credit and consumption.

It is very easy to talk about entrepreneurship when the proposal is made in the neoliberal line “you are the entrepreneur, you manage”; "if it's cool, it becomes a meme, if it's bad, it becomes a debt". But seriously consider funding start ups, subsidizing risks and securitizing contributions, with the responsibility and structure they need – this positive and necessary agenda is far from happening in any government program of economic reform that is coming.

Roberto Campos Neto knows he has little room for maneuver after President Lula himself was clear in his statements: Brazil needs to lower interest rates. But, he gave little hearing to the appeal. He performs an operation that suits him with prudence, and it doesn't matter whether he wins or loses the moral battle, because he buys time and wins the dispute in the long run. His move is well known: the Central Bank is stalling. And when winding, it makes the wheel turn to the same side.

To win this battle against the conservatives, the government needs to reposition itself. In negotiation techniques, time and the environment are the two external vectors with the greatest influence on results. Internally, bargaining power is the preponderant vector. Taking into account these three fundamental requirements, bargaining power, objectives, time and space are fundamental for this process. Lula doesn't have the time and he also doesn't compete with Roberto Campos Neto in the best arena.

By publicly declaring his dissatisfaction, he places the debate in the newspapers and the media, which may favor him, but in general they will problematize the issue (sometimes giving one reason and sometimes another) to sell audience. The media also prolongs the debate, wants to hear experts from all over the world and grants time that the government does not have, in addition to undermining the future confidence of the business community by investing in the controversy.

If time and space are at a disadvantage, believe me: this is not even the government's main weakness in the matter. Lula has little bargaining power to act against the Central Bank presidency. And these are the keys to the debate. The autonomy of Branco Central did not give its president more power. It gave him bargaining power. Lula, therefore, today has less power over COPOM's decisions, not because he does not control it, but because he needs to use more power to control it. Perhaps a power he now has difficulty finding to use.

On this point the government errs. It is necessary to unlink the political capacity of the government power of the three mandates to understand the imbroglio. Lula I (2003-2006) and Lula II (2007 – 2010), with Lula III (2023). In the first government, Lula took over with immense political capital, close to 100 deputies elected by the PT and as a party on the rise. It could negotiate less and impose more decisions. In the second term, the time of government and the surgical changes could be made, with an opposition still in a state of shock with the defeat and found little resistance to its governability. Today's government is different: it needs to redo its political calculation and observe that its position in society must be strengthened and paved and, even more problematic: this movement requires time and positive results to present.

What the government itself knows is that it lives the “tostines paradox”: is it fresh because it sells more, or does it sell more because it is fresh? Without a popular base, it cannot achieve political strength to implement its government agenda, without an agenda that gives positive results to the government, it cannot raise popular support necessary to gain negotiation margin with Centrão and with the parasites of the physiological system of power. This is the trauma today that paralyzes the government and allows little progress in the main area of ​​debate since the elections: to be better in the economy and improve people's lives.

What the government does not seem to know is that to get out of the paradox of little power, little decision efficiency, little decision efficiency, little power, it is not possible simply by trying to level up at both ends of the paradox. Generally, paradoxes form a “vicious cycle” – and a vicious cycle can only be broken by breaking one of the bonds. The Lula government, although elected by a broad front, cannot generate effects without some rupture, or it will tend to be a continuation of the previous government that ended up hostage to the Centrão.

It is necessary to recompose the negotiation position. The most direct way out is for political articulation to summon the base of the Senate and establish a vote of no confidence against Roberto Campos Neto for presenting unsustainable results in the economy. Placing him as a match in the government makes him lose the advantage he has in time and space. With this, one can break the vicious cycle of the paradox and lead the government to new political arrangements. In addition, it presents an outcome to the question in a timely manner for action by the government: if Congress approves the removal of Roberto Campos Neto, the authority of the Treasury takes over the direction of the points in the economy and can reorganize its action plan. If the Senate refuses to remove the President of the Central Bank, it assumes the burden of the bad result that today is being thrown on Lula's shoulders. In addition, the government gains support and a popular base to face the Congress that today wants to determine how the budget is executed.

Things are very clear about “who” represents and “what” is represented at this moment. Lula's and the government's reading of the president of the Central Bank is clear. The only missing piece of the puzzle to act more incisively is the understanding that starvation also dies, it's a matter of time.

*Luis Fernando Vitagliano political scientist and university professor.


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