♟️ First moves of the third way

IN THIS ISSUE

• Two right-wing parties are set to form biggest bloc in Congress, eyeing 2026

• Congress and Supreme Court considering Jan. 8 amnesty compromise

• At Web Summit Rio, VCs reveal what investors want

Right-wing flexes muscles, but Lula bounces back

Two of Brazil’s most influential parties — União Brasil and the Progressives (PP) — are expected to formalize a federation today, creating what would be the largest bloc in Congress. The alliance brings together the political heirs of Arena, the now-defunct party that once served as the military dictatorship’s political arm in Congress.

Into the weeds. Party federations consist of a new form of congressional alliance in Brazil, binding parties together for an entire legislature (this one expires after 2026). These federations were conceived as a way to provide small parties with an opportunity to circumvent sanctions for failing to meet performance thresholds, and to reduce congressional fragmentation.

👉 Why it matters. Together, the União Brasil-PP bloc would control 109 seats in the House and 14 in the Senate, more than Lula’s Workers’ Party (PT) or Jair Bolsonaro’s Liberal Party (PL). Their goal? To boost bargaining power without formally joining the opposition, as the two parties control four cabinet ministries between them.

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