🌎 A global front against the far-right?

Happy Friday! Today, we talk about Lula’s plan to counter the global far-right. A Supreme Court move to help public finances. And more information about acts of domestic terrorism carried out in 2023.

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Lula wants to create group to block global far-right

Brazilian President Luiz Inácio Lula da Silva this week said that he wants to hold a meeting with “democratic” heads of government and state to discuss strategies to contain the growth of the far-right around the world. 

• The idea, he said, has already been pitched to Spanish Prime Minister Pedro Sánchez and French President Emmanuel Macron — and Lula wants to discuss it with other leaders ahead of this year’s United Nations General Assembly in September.

In his words. “If you take South America today, you realize that there was a setback precisely because of the knowledge of the extreme right, the growth of xenophobia, the growth of racism, the persecution of minorities, the social and cultural agenda often with retrograde issues,” Lula told reporters.

• Lula also cited religious intolerance as a problem that has reached unprecedented levels in recent years.

 Why it matters. Far-right groups from many countries have collaborated, though not necessarily acted in tandem. Brazil’s extremists, for instance, have for years traded knowledge and gained the cooperation of the U.S. alt-right — with pro-Donald Trump lawmakers even taking Brazilian culture war issues to the U.S. Congress.

• To see the results of these interactions, one needs to look no further than the similarities between the insurrection of January 6, 2021 in Washington D.C. and the Brasília riots of January 8, 2023.

Surf the wave? Lula said he wants to take initiative while momentum is on Brazil’s side, citing an “optimism in diplomatic relations” with his administration. 

Yes, but … That optimism may be an overstatement, as the president and his administration have made tons of unforced errors in foreign policy since before Lula took office in January 2023. From blaming Ukraine for the 2022 Russian invasion of the country, to cozying up to dictatorships, or its posture regarding the Israel-Hamas conflict, all of these incidents have sent mixed messages to Western allies.

Zanin does Lula a solid

Supreme Court Justice Cristiano Zanin on Thursday issued an injunction suspending provisions of a law extending payroll tax breaks to companies from 17 sectors until 2027. The justice wrote in his opinion that the move risks creating a “significant imbalance in public accounts and threatens to make the fiscal regime enshrined in the Constitution hollow.”

• The rest of the court has until May 6 to vote on whether or not to confirm Justice Zanin’s decision.

Twists and turns. The benefit was set to expire at the end of 2023, but lawmakers extended it until 2027. In November, President Luiz Inácio Lula da Silva vetoed the extension outright to raise revenue, but Congress overrode his veto. 

• Lula then issued a provisional decree partially limiting the impact of the tax break, which congressional leaders are currently debating. The Senate watered the decree down and went ahead with granting exemptions to small municipalities.

 Why it matters. The state of public accounts is iffy at the moment. The government has already asked Congress for a laxer fiscal target next year — and the deputy finance minister has admitted that meeting the zero-deficit target for this year is a tall order.

Political jenga. Without a majority in Congress, the government is relying on the Supreme Court to win over lawmakers on many thorny disputes. It is a case of the government using the few weapons it has — but it is not a strategy without risk, especially at a time when Congress and the Supreme Court are at each other’s throats.

• Lawmakers see justices essentially trying to legislate by ruling on issues they believe should be left to Congress — such as drug decriminalization, indigenous land rights, or same-sex marriage. 

• Many of the moves by the justices have been met with an upfront challenge from Congress in the form of passing legislation to contradict Supreme Court interpretations of existing laws.

2023 tower attacks an act of sabotage

A report by Brazil’s federal energy regulator Aneel reveals previously undisclosed information about attacks on overhead power lines in January 2023, including one on the night of the January 8 riots and two others on the early hours of January 9. There were a record 14 criminal attacks on energy transmission sites in January 2023, in all of Brazil’s five regions.

• The report was first obtained by Agência Sportlight through access to information instruments. A summarized version of the findings had been made publicly available in mid-2023 at the request of the joint congressional committee on the January 8 riots.

 Why it matters. Aneel’s full report uses the word “sabotage” more often to describe the incidents than the report sent to Congress last year. For instance, it refers to the January 8 attack on a Eletronorte tower in the northern state of Rondônia as deliberate acts of “sabotage” as opposed to “vandalism” — as written earlier.

Remember. Multiple acts of domestic terrorism preceded and ensued from the Brasília riots of January 8. At the end of 2022, a group tried to place a bomb at Brasília airport, buses were torched on the day the Superior Electoral Court validated the results of the 2022 election. After radicals tried to storm or block oil refineries and damaged power transmission lines.

Yes, but … Aneel’s report describes each incident individually but does not draw conclusions as to whether they were related or followed similar procedures.

No smoking gun. The final report of the January 8 panel addressed the issue, but lawmakers did not manage to find smoking-gun evidence. The report says “there are indications” that the group of rioters “is related” to the attacks on transmission towers. 

• “In fact, attacks on infrastructure installations are part of special forces training,” the report says. Lawmakers suspect that military special forces are behind the attacks, but the investigation did not proceed further. 

Quick catch-up

Shareholders of Brazil’s oil giant Petrobras approved the payment of around BRL 22 billion (USD 4.2 billion) in extraordinary dividends relating to Q4 2023, reversing a previous board decision and ending a long public dispute that seemed to threaten the job of chief executive Jean Paul Prates.

Tax Reform Secretary Bernard Appy said this week that all cross-border purchases will be taxed under the new rules the government proposed to regulate the tax reform. Currently, purchases of up to USD 50 don’t pay import levies.

The federal government is negotiating the contribution of USD 500 million from the New Development Bank in regional development funds for infrastructure projects.

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