To avoid a new strike, Petrobras panders to truck drivers

Author

Gustavo Ribeiro
March 27, 2019 • Reading Time: 6 minutes

Good morning! Is the pension reform doomed? Meanwhile, the VP pleads for “common sense.” To avoid a new strike, Petrobras panders to truck drivers.

Is the pension reform doomed?

Economy Minister Paulo Guedes decided not to show up before the lower house’s Constitution and Justice Committee (CCJ) to defend the pension reform yesterday. As the government’s (supposed) allies would not be present, an irritated Mr. Guedes feared being ambushed by opposition parties who would attack him to get to President Jair Bolsonaro (who was, while was this was unfolding, at the movies with his wife).

Later on in the day, the House approved a different constitutional amendment which takes control over a part of the federal budget away from the government. The bill states that the administration must honor investments proposed by lawmakers. The bill is now in the Senate, where the chamber’s president Davi Alcolumbre said he will give it his “unrestricted support.” If the bill passes, the government will effectively control only 3% of the budget. 

The bill was presented in 2015, when Congress was trying to sabotage the Dilma Rousseff administration—and goes completely against what Mr. Guedes’ agenda defends. In response, the government has admitted to slashing the most controversial parts of the pension reform—changes to rural pensions, cuts on benefits for the poor, and the measure which would allow for future changes to be made to pensions without altering the constitution. The government is caving even before the congressional debates have begun.

Meanwhile, the VP pleads for “common sense”

Vice President Hamilton Mourão met with 700 businessmen at the Federation of Industries of São Paulo (FIESP). The former Army general asked the attendants (which included the bosses of Google and Bradesco) for a vote of confidence in the government, saying that “common sense” must prevail in negotiations with Congress.

During the event, the VP sided with Economy Minister Paulo Guedes on issues related to the pension system. He defends a harsher version of the bill, stating that “it is time to reassess the commitments made by the 1988 Constitution.” Which sounds like music to the ears of the markets.

Amid the disarray of the Bolsonaro government, Gen. Mourão has been considered by many as “the adult in the room,” and has sought for a much more active role than other vice presidents have in the past. He has met with foreign diplomats, businessmen, and trade unions—which has sparked criticism from his allies, who see in him an attempt to diminish the influence of Jair Bolsonaro. Recently, the president’s intellectual guru, Olavo de Carvalho, called the VP an “idiot.”

To avoid a new strike, Petrobras panders to truck drivers

As some truck drivers go about organizing a strike on social media, Petrobras announced changes to its diesel pricing policies. Since January, as the federal government stopped subsidizing fuels, prices were readjusted weekly. The company announced new prices will be calculated every 15 days, meeting truckers in the middle after they demanded it took place monthly. BR Distribuidora, a Petrobras subsidiary, will also launch a card allowing truckers to purchase fuels in advance at fixed prices—giving them more predictability.

A report from UBS bank considers that the move—which panders to truck drivers with the specter of a new strike looming—could motivate legal challenges by independent importers. However, the markets received the news very well. Petrobras shares rose by almost 5% (also motivated by a 1.2% hike in international oil prices).

The government believes a new truckers’ strike is unlikely—at least not in the same proportions it had last year, when it created food and fuel shortages across the country, generating BRL 20bn in losses. According to the government’s chief security office, truckers are no less united than in 2018. Fuel producers argue that fuel prices are not the truckers’ biggest problem—that would be the sluggish economy, which impacts the amount of cargo transported in the country.

What else you need to know today

  • The left. Fernando Haddad (Workers’ Party) and Guilherme Boulos (Socialism and Liberty Party), both presidential candidates in 2018, hosted a meeting with other left-leaning parties to create a front in opposition to Jair Bolsonaro. In their manifesto, the group asked for the release of President Lula—one of the most divisive issues in Brazilian politics right now. 

  • Dictatorship.The Public Defenders’ Office has filed a lawsuit asking a federal court to forbid the government from celebrating the anniversary of the 1964 military coup, as called for by President Bolsonaro. The plaintiff says the move could be defined as misconduct in office, an impeachable offense. Meanwhile, the Ministry of Human Rights announced an audit on pensions paid to former political prisoners during the dictatorship.

  • Supreme Court.Twice, senators amassed the necessary signatures to open a parliamentary investigation committee to scrutinize Brazil’s superior courts—but on both occasions, congressional leaders managed to suffocate the initiative. Yesterday, Senate President Davi Alcolumbre decided not to move forward with the committee, based on a technicality. The move could help lower tensions between the different branches of government.

  • Startups.UiPath, a startup focused on artificial intelligence (and has Sequoia Capital and Google’s controller as investors), launches its Brazilian operation tomorrow. The company will be headed by Paulo Pellon, a former IBM and Oracle executive, and has 20 employees—a number that should double this year.

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