Significance: The federal government had already been clear that there would be no attempt to reform the pensions system, fix government spending limits, and change labour laws before the federal senate holds its final vote on whether to impeach the suspended president, Dilma Rousseff, at the end of August. Now the leader of the interim-government-supporting coalition in the federal chamber of deputies, André Moura of the Partido Social Cristão (PSC), says that the legislature is unlikely to touch any of these highly controversial measures until after the municipal elections.
• While basic legislative bills require only a simple majority in the federal chamber of deputies, or 257 out of 513 votes, around 90% of federal government spending is defined by the constitution. A constitutional amendment, such as spending limits, requires the support of three-fifths of the chamber. “The government wants the utmost speed on the spending PEC [constitutional amendment] but, because of the timetable, there is no way of voting on that before the elections”, Moura told O Globo. He added: “And the reform to pensions and labour laws will have to wait as well”.
• Corporate cash donations have been restricted in these elections, since a supreme court (STF) ruling last year, in an attempt to limit the influence of the so-called ‘caixa 2’ or off-the-books money donations. However, there are various ways around this, such as the bundling together of individual donations; and the interim president, Michel Temer, has handed around R$2bn (US$613m) of federal cash in his few months in the presidency to the public works’ projects of city halls allied to his Partido do Movimento Democrático Brasileiro (PMDB).
• In the city of Rio de Janeiro, the election in the Baixada Fluminese, the state capital’s neglected northern suburbs, provides a worrying indication of the levels of violence that may return after the Summer Olympics, which are due to start in Rio on 5 August. Nine candidates for the municipal elections in the Baixada have been murdered since late last year, often in broad daylight, as militias – mafia-type organisations dominated by off-duty police officers – attempt to expand their influence from the Rio’s west zone to the north.
Looking Ahead: Although Brazil’s domestic economy continues to contract and unemployment remains high, there are signs that confidence is picking up among consumers and industries, according to the official statistics institute (Ibge). So far this appears to be based on little more than confidence in the economic team that the interim government has installed. Stocks have risen by 31% this year, and the Real has risen by 22% against the US dollar.
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