Arrest of pro-Bolsonaro politician brings institutional tension back to the boil

. Feb 17, 2021
supreme court congressman daniel silveira The Supreme Court ordered the arrest of Congressman Daniel Silveira. Photo: Cleia Viana/CD/ASCOM/CN

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Back from the Carnival break, we bring you a fresh institutional crisis in Brazil, as the Supreme Court arrested a pro-Bolsonaro lawmaker. And how Brazilian companies stumbled at the beginning of 2021.

A new institutional crisis has been unleashed

Supreme Court Justice Alexandre de Moraes ordered the arrest of Congressman Daniel Silveira on Tuesday night.

The lawmaker had published a slew of insults against the court and its members, reigniting an apparently dormant investigation into the use of fake news targeting justices. In his decision, Justice Moraes called Mr. Silveira a &#8220;recidivist criminal&#8221; and cited an investigation against him for &#8220;inciting the subversion of public order.&#8221;</p> <p><strong>Who is Daniel Silveira.</strong> A rookie congressman and former military police officer, Mr. Silveira rose to prominence during a public rally in 2018 when he destroyed a placard honoring Rio de Janeiro City Councilor Marielle Franco — who had been assassinated earlier that year. A radical supporter of President Jair Bolsonaro, he has been involved in <a href="">numerous controversies</a> and acts of violence.</p> <ul><li>In June 2020, he used Twitter to <a href="">threaten anti-fascist protesters</a>, saying he would “unload [his] gun clip” on them, in case of a confrontation.</li></ul> <p><strong>Context.</strong> The case which culminated with Mr. Silveira&#8217;s arrest began last week, after excerpts of former Army Commander Eduardo Villas-Bôas&#8217;s memoirs <a href="">became public</a>. In the book, the retired general describes, in detail, how the Armed Forces Command tried to skew a Supreme Court trial in its favor.&nbsp;</p> <ul><li>On April 3, 2018, ahead of a trial to decide whether former President Luiz Inácio Lula da Silva should be arrested following multiple criminal convictions, Gen. Villas-Bôas tweeted that the Army was keen to see the constitution being respected and social peace maintained — the next day, the court ruled <a href="">6-5 in favor of Lula&#8217;s arrest</a>.&nbsp;</li><li>After the excerpts came to light, Supreme Court Justice Edson Fachin issued a statement criticizing the move, to which Gen. Villas-Bôas sarcastically replied that the justice was &#8220;three years too late.&#8221;</li><li>In the video which triggered his arrest, Congressman Daniel Silveira praised the retired general and called Justice Fachin the &#8220;cream of the crap,&#8221; during an expletive-filled 19-minute rant which included threats to &#8220;beat up&#8221; the court&#8217;s members.&nbsp;</li></ul> <p><strong>Why it matters.</strong> The decision should create an even bigger rift between the Supreme Court and Congress. As in all arrests of serving lawmakers, the House&#8217;s floor must decide on whether to ratify or nullify the ruling.</p> <p><strong>Radicalism. </strong>That is without mentioning the possible effects the move could have on the <a href="">more radical sectors of Bolsonarism</a>. Just last year, the president&#8217;s supporters took to the streets to call for a military coup and the arrest (or execution) of the 11 Supreme Court justices.</p> <ul><li>When announcing he was being detained, Daniel Silveira gave an indication of things to come: &#8220;[Justice Moraes], you are entering an arm-wrestle you can&#8217;t win.&#8221;</li></ul> <iframe src="" width="100%" height="232" frameborder="0" allowtransparency="true" allow="encrypted-media"></iframe> <hr class="wp-block-separator"/> <h2>Half of companies see profits shrink in 2021</h2> <p>A survey by think tank Fundação Getulio Vargas suggests that nearly half of Brazilian companies have kicked off the year with lower profits when compared to the same period in 2020. The study included 4,044 firms from four sectors: industry, commerce, services, and construction.</p> <p><strong>The causes.</strong> According to the study, the slowdown in economic activity is largely caused by recent spikes of coronavirus cases and the end of the emergency salary program.&nbsp;</p> <p><strong>Why it matters.</strong> Economic conditions are unlikely to improve in the short term, reverting expectations that Brazil was soon set to recover from the losses imposed by the pandemic.</p> <div class="flourish-embed flourish-chart" data-src="visualisation/5320313"><script src=""></script></div> <div class="flourish-embed flourish-chart" data-src="visualisation/5320272"><script src=""></script></div> <p><strong>Where it hurts the most.</strong> The clothing sector was the worst-hit, with 90 percent of companies reporting a fall in profits. Shoemakers, vehicle producers, as well as restaurateurs and hospitality firms come next.</p> <ul><li>These are sectors which rely heavily on brick-and-mortar establishments crowded with people. As cases and deaths go up, people start circulating less — and uncertainties around the economy make consumers even less likely to spend.</li></ul> <p><strong>Flipside.</strong> The pharmaceutical industry has not met a crisis. Over 51 percent of companies in the sector have seen profits soar. Commodities producers are also enjoying a positive moment, thanks in part to a growing Chinese appetite for products.</p> <hr class="wp-block-separator"/> <h2>Markets</h2> <p>Fitch Ratings has kept Petrobras&#8217; local and foreign currency long-term issuer default ratings (IDRs) and outstanding debt ratings at BB- (speculative), with a negative outlook. Fitch explains that ratings for the state-controlled oil and gas giant are tied to Brazil&#8217;s sovereign ratings — which are also at BB- with a negative outlook — as the company remains exposed to &#8220;government intervention through pricing policies and investment strategies.&#8221;</p> <hr class="wp-block-separator"/> <h2>Expect a boom in Covid-19 cases</h2> <div class="wp-block-image"><figure class="aligncenter size-large"><img loading="lazy" width="480" height="270" src="" alt="carnival brazil" class="wp-image-56780"/><figcaption>February 14: people enjoying Carnival in Rio Grande do Sul, Brazil&#8217;s southernmost state. Photo: Twitter/@EduPaganella</figcaption></figure></div> <p>Despite the efforts of multiple cities to <a href="">prevent revelers from celebrating Carnival</a> amid the pandemic, there were several reports of clandestine parties across the country. Dozens of establishments were shut down by inspectors in Rio de Janeiro and São Paulo. If past holidays are anything to go by, Brazil should see a significant surge of infections over the next couple of weeks.</p> <div class="flourish-embed flourish-scatter" data-src="visualisation/5319530"><script src=""></script></div> <hr class="wp-block-separator"/> <h2>Looking ahead</h2> <ul><li><strong>Vaccines. </strong>A lack of available vaccine doses has forced Brazilian state capitals to suspend their inoculation efforts. On Tuesday, the cities of Salvador and Cuiabá stopped administering initial jabs to new patients to ensure that those already immunized may receive a second dose. Rio de Janeiro will <a href="">do the same</a>, and Curitiba could follow suit as of Friday. Florianópolis and Fortaleza are also running out of doses. The National Confederation of Municipalities <a href="">demands the sacking</a> of Health Minister Eduardo Pazuello.</li><li><strong>No government plan. </strong>State governors will meet with Mr. Pazuello today to demand a monthly timetable for vaccine deliveries in each state. Last week, the Health Minister said the <a href="">entire Brazilian population</a> would be inoculated by year-end — but in the first month of vaccination, only 2.6 percent of Brazilians have been reached.</li><li><strong>Curfew.</strong> Bahia Governor Rui Costa will impose a seven-day curfew between 10 pm and 5 am in most of the state as a means to contain the spread of the coronavirus. The rule will become effective on Friday; 74 percent of the state&#8217;s Covid-19 intensive care units are currently filled. On <a href="">Twitter</a>, Mr. Costa said the complete list of cities where the curfew will take effect will be included in a decree to be published today.</li><li><strong>Bolsonaro.</strong> The Federal Prosecution Office informed the Supreme Court that it has <a href="">nine ongoing inquiries</a> into the conduct of President Jair Bolsonaro, according to newspaper Folha de S.Paulo. One such inquiry concerns whether Mr. Bolsonaro committed a crime when he incited supporters to storm hospitals to verify if ICU beds were occupied — or if the surge of hospitalizations due to the coronavirus reported in the press was just a hoax.&nbsp;&nbsp;</li></ul> <hr class="wp-block-separator"/> <h2>In case you missed it</h2> <ul><li><strong>Pazuello.</strong> Health Minister Eduardo Pazuello <a href="">went to the Senate last week</a> in an attempt to convince lawmakers that the federal government is doing everything in its power to contain the spread of the coronavirus. Senior officials of the Jair Bolsonaro administration said his performance would be decisive to nix opposition plans to launch a congressional hearings committee into the Health Ministry’s pandemic response. But even his allies admitted that his performance was poor: Mr. Pazuello’s statements were reportedly dismissed as woeful, confusing, contradictory, and even misleading.</li><li><strong>Central Bank.</strong> Congress passed a bill establishing the <a href="">formal independence of the Brazilian Central Bank</a>. Its nine-member board will continue to be appointed by the president, but they will have fixed four-year terms (which won&#8217;t coincide with presidential terms) and will be able to extend those terms by another four years.</li><li><strong>Emergency aid. </strong>The return of the coronavirus emergency aid is being treated in Brasília corridors as a <em>fait accompli</em>. With millions falling below the poverty line and a slow vaccination effort that could see the country’s economic outlook remain negative for months — not to mention the proximity to the 2022 election — lawmakers are set to vote on a <a href="">new aid package</a> in the coming weeks.</li><li><strong>Labor.</strong> The International Labor Organization (ILO) has called out Brazil for <a href="">lifting labor rights</a> amid the pandemic. Last year, the government allowed companies to suspend or cut wages as a way of preserving jobs — a regulation that is no longer valid. Still, the ILO requests that the government ensure all employees&#8217; benefits have been restored.</li><li><strong>Justice.</strong> A group of 15,000 families from Maceió — the capital of northeastern state Alagoas — have filed a class-action lawsuit in the Netherlands against petrochemical group Braskem. The company is accused of causing large cracks in the ground and serious damage to real estate in Maceió, claims backed up by a report issued by the Brazilian geological service in May 2020. The move is part of a <a href="">growing trend</a> for victims of large mining companies: filing class-action lawsuits in European courts, seeking harsher — and quicker — penalties against miners.

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