Brazilian court supported the current president
2022.12.19 13:44
Brazilian court supported the current president
Budrigannews.com – On Monday, Luiz Inacio Lula da Silva, the incoming president of Brazil, won two significant victories: the Supreme Court banned an opaque congressional spending program and issued an injunction allowing him to increase social investment.
Justice Gilmar Mendes of the Brazilian Supreme Court issued a ruling late on Sunday that granted an injunction that lifted the constitutional spending cap on a 600-reais monthly allowance for low-income families and temporarily authorized the payment’s extension into the following year.
The full bench of the court then decided on Monday that the “Secret Budget” program, which gives Congress more control over public resources, was illegal.
Both of these decisions are advantageous to Lula because they enable him to carry out a campaign promise to increase spending on social programs and also give him more negotiating leverage over congressional leaders by limiting their capacity to obtain concessions through opaque means.
Jair Bolsonaro, the incumbent from the far right, used the “Secret Budget” program to gain support in Congress. It was criticized for its lack of transparency as it distributed funds to legislators through bill amendments.
Roberto Lewandowski, a justice on the Supreme Court, cast the decisive vote that made the measure illegal, defeating Arthur Lira, the leader of the lower house, and Rodrigo Pacheco, the president of the Senate.
Lira canceled his Monday appointment to meet Pacheco following the decision.
The decision made by Mendes, which still needs to be approved by the entire Supreme Court bench, relieves Lula of the burden of passing a constitutional amendment that would enable him to carry out a campaign promise and invest more in the poor of the country.
The bill’s most important part was increasing the spending cap to include Lula’s social package. The bill has been approved by the Senate and is now ready for the lower house to vote on.
Following Mendes’ ruling, Brazil’s real currency experienced early weakness on Monday, but it later recovered its losses.
Fernando Haddad, the new Finance Minister under Lula, told reporters on Monday that, despite Menders’ decision, discussions regarding the bill would continue.
He stated, “It is important for the country to bet on good politics, negotiation, institutionality, and for us to give strength to the economic policy that… will appease the market’s mood and show that Brazil will be on track from January 1.”
Currency markets, according to investors, wanted to know what the decision meant.
According to Fabrizio Velloni, the chief economist at Frente Corretora, “Mendes’ decision left the market confused.” Today’s exchange rate for the dollar is likely to be extremely volatile.”
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In order to boost social welfare programs, Lula’s bill aims to exempt at least 100 billion reais ($19 billion) from the spending cap next year.
