France’s Macron asked to “bury” Mercosur-EU deal

. Sep 17, 2020
deforestation pantanal Pantanal fires continue out of control. Photo: Mayke Toscano/Secom/MT

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Today, we look at the financial consequences of Brazil’s nonchalant approach to deforestation. The reduction in the emergency salary for vulnerable populations. And the Bolsonaros’ continuing legal problems.

Pressure mounts as Brazil’s environmental tragedy continues

The Amsterdam Declaration Partnership, a group of eight European nations currently led by Germany,

has urged Brazil to take &#8220;real action&#8221; against deforestation in the Amazon. “While European efforts are aiming at achieving deforestation-free supply chains, the current trend of rising deforestation in Brazil is making it increasingly difficult for businesses and investors to meet their environmental, social, and governance criteria,” the group said in a two-page letter to Vice President Hamilton Mourão.</p> <p><strong>Why it matters.</strong> The signatory countries of the Amsterdam Declaration Partnership accounted for 10 percent of Brazilian agricultural exports in 2020.</p> <ul><li>Meanwhile, a group of 30 NGOs, including Greenpeace France, demanded that French President Emmanuel Macron &#8220;bury once and for all&#8221; the EU-Mercosur free-trade deal, citing its possibly &#8220;disastrous&#8221; impacts on forests, the climate, and human rights.</li></ul> <div class="flourish-embed flourish-hierarchy" data-src="visualisation/3761606" data-url="" aria-label=""><script src=""></script></div> <p><strong>Reaction.</strong> VP Mourão said he plans on taking foreign ambassadors to visit the Amazon region. And President Jair Bolsonaro called international outcry a &#8220;disproportionate&#8221; reaction.</p> <p><strong>Strange bedfellows.</strong> The government&#8217;s nonchalance has sparked a curious alliance in Brazil. A group of 230 institutions, including both agricultural producers and environmentalist NGOs, have teamed up to propose anti-deforestation proposals. Major producers fear losing markets due to the country’s increasingly pariah-like image created by the recent spike in deforestation rate.</p> <ul><li>One of the firms involved in this pledge is meat giant JBS&nbsp;—&nbsp;recently cited in a report stating that its supply chain includes — directly and indirectly — farms that may have <a href="">deforested at least 1.7 million hectares</a> of native vegetation in the Amazon and the savannah-like Cerrado biome since 2008.</li></ul> <p><strong>Wildfires.</strong> European pressure ramps up as fires in the <a href="">Pantanal wetland region continue to rage uncontrolled</a>. Smoke particles from the Pantanal fires should reach the state of São Paulo today —&nbsp;which could cause &#8220;black rain&#8221; over the weekend. A similar phenomenon has already been observed in Brazil&#8217;s South over the past few days. It is possible that the smoke could travel as far as the Rio de Janeiro coast. In multiple states, the sky could turn a shade of orange.&nbsp;</p> <figure class="wp-block-image size-large"><img loading="lazy" width="768" height="512" src="" alt="deforestation smoke" class="wp-image-49741"/><figcaption>Smoke particles traveling through South America. Image: EAS/Copernicus</figcaption></figure> <hr class="wp-block-separator"/> <h2>The new emergency salary</h2> <p>The government starts today a new round of payments of the coronavirus emergency salary. For the first time, its value will be only BRL 300 (USD 57) instead of the usual BRL 600. In order to maintain the aid until the end of the year, the government halved its value due to budgetary constraints.</p> <p><strong>Why it matters.</strong> The aid program has accounted for <a href="">97 percent of the income</a> for the country&#8217;s poorest 10 percent. This group will lose 44 percent of its purchasing power instantly.</p> <div class="flourish-embed flourish-chart" data-src="visualisation/3511669" data-url="" aria-label=""><script src=""></script></div> <p><strong>Political challenges.</strong> The emergency salary has also boosted Jair Bolsonaro&#8217;s approval ratings. As the benefit is reduced, we will observe and report back how voters react.</p> <ul><li>The latest opinion polls show a downward trend in the president&#8217;s popularity. On August 19, 52 percent of Brazilians approved of his administration —&nbsp;a rate that is now down to 49 percent. While the difference is marginal, analyzing polls is more about the curve rather than looking at the isolated numbers.</li></ul> <div class="flourish-embed flourish-chart" data-src="visualisation/3761978" data-url="" aria-label=""><script src=""></script></div> <hr class="wp-block-separator"/> <h2>Bolsonaro tries to avoid in-person testimony</h2> <p>The Solicitor General&#8217;s Office has appealed a decision by Supreme Court Justice Celso de Mello <a href="">denying President Jair Bolsonaro the possibility of giving a written testimony</a> during a probe on whether he illegally interfered with the Federal Police. The benefit is often granted to heads of state in similar situations, but Justice Mello said he will treat the president &#8220;like any other citizen under investigation.&#8221;</p> <ul><li>The president has already been summoned by the Federal Police, who proposed three alternate dates for a deposition next week.</li></ul> <p><strong>Why it matters.</strong> While the investigation will likely go nowhere, as the prosecutor general — who is in charge of probes against the president — has done everything in his power not to go against Mr. Bolsonaro&#8217;s interests. Still, it could further damage an already strained relationship between the Supreme Court and the government.</p> <p><strong>Running out the clock.</strong> Justice Mello’s mandatory retirement will begin in November, when he reaches 75 years old. The government is trying to stall the case as much as possible, so that it would fall into the hands of another justice. There is even the possibility of the case going to Justice Mello&#8217;s replacement — who would be picked by President Bolsonaro.</p> <p><strong>Meanwhile … </strong>Two of the president&#8217;s politician sons —&nbsp;Carlos and Eduardo Bolsonaro —&nbsp;were also summoned to testify in an investigation into antidemocratic rallies that called for the shutdown of Congress and the Supreme Court. The probe was started based on the National Security Law — an instrument dating back to the dictatorship that was used to silence political opponents.&nbsp;</p> <hr class="wp-block-separator"/> <h2>What else you need to know today</h2> <ul><li><strong>Infrastructure.</strong> Communications Minister Fábio Faria said five companies are willing to compete for the <a href="">privatization of Correios</a>, Brazil&#8217;s state-owned postal services firm. He only named four: retailers Magazine Luiza and Amazon Inc, as well as logistics giants DHL and FedEx. Correios employees initiated a strike on August 17, protesting against the government&#8217;s intention to privatize the company, as well as asking for better working conditions.</li><li><strong>Interest rates.</strong> As expected, the Central Bank&#8217;s Monetary Policy Committee kept Brazil&#8217;s benchmark interest rate Selic at 2 percent a year —&nbsp;breaking a streak of nine straight cuts. The committee says &#8220;short-term inflation will rise due to a temporary food price increase and to a partial normalization of some service prices,&#8221; adding that further cuts to the Selic rate will be small —&nbsp;if they happen at all.&nbsp;</li><li><strong>Coronavirus.</strong> House Speaker Rodrigo Maia announced that he tested positive for <a href="">Covid-19</a>. So far, Vice President Hamilton Mourão remains as the only person in the presidential succession line not to have been infected by the coronavirus —&nbsp;President Bolsonaro, Mr. Maia, Senate President Davi Alcolumbre, and Supreme Court Chief Justice all have.&nbsp;</li><li><strong>Schools.</strong> With the 2020 academic year already compromised, Brazilian private schools are making their financial plans for 2021&nbsp;— and face a true conundrum. If they raise tuition fees too much, they could lose students as most families have lost revenue during the pandemic. But raise them too little, and they could hurt their finances. A decision must be made by December 15.</li><li><strong>Rio.</strong> State lawmakers in Rio will vote today on whether to hold an impeachment trial against <a href="">suspended Governor Wilson Witzel</a> — who is accused of embezzling funds earmarked for the fight against the coronavirus. Meanwhile, the state capital&#8217;s City Council will vote on whether to open impeachment proceedings against Mayor Marcelo Crivella, suspected of siphoning public money and laundering it through evangelical churches.</li><li><strong>Budget 2021. </strong>Senator Márcio Bittar, the rapporteur of the <a href="">2021 budget in Congress</a>, said President Jair Bolsonaro authorized him to include a new welfare program in next year&#8217;s budget —&nbsp;just a day after Mr. Bolsonaro said the subject was not to be discussed within his administration anymore. &#8220;It&#8217;s better if we create this program now, so millions of people can have a good holiday season,&#8221; said Mr. Bittar, who admitted he has no idea where the money will come from.

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