The first movements of Congressman Arthur Lira as the new House Speaker were by no means coincidental. Among the first bills he put to a vote was a proposal granting the Central Bank formal independence from the government — something Brazilian economists have debated over for the last 30 years or more. Besides being a strictly pro-market move, it was also a way for Mr. Lira to prove he is powerful enough to build consensus and overcome the leftist opposition in the House. When approving the bill, he was able to whip many more votes than the minimum required to pass a constitutional amendment.
The new Senate President Rodrigo Pacheco sent similar signals — pushing forward a bill creating credit lines for agricultural producers.
Messrs. Lira and Pacheco sent a clear message to the government — and the market — that they have the political muscle to pass structural reforms. That is, if they want to.