Brazilian center-right forces try to create massive new party

As we explained at the beginning of the 2018 election campaign, coalition-building has become a lucrative business in Brazilian politics. A total of 24 parties have congressional representation, with the biggest party in the lower house holding less than 11 percent of seats. As such, making alliances is necessary for any ruling force. As former President Lula said in 2009 “if Jesus wanted to govern in Brazil, he would be forced to enter a coalition with Judas.”

In several industries — such as aviation, telecoms, or healthcare — big corporations have used mergers and acquisitions to increase their market power in recent decades. And in the political sphere, one potential merger has the potential to disrupt the entire market: the center-right Democratas party is currently in negotiations to form a single entity with the right-wing Social Liberal Party (PSL), for which Jair Bolsonaro ran for the presidency in 2018.

If the deal is confirmed — and that remains a sizeable if — the new party could become the largest party in Congress by a mile. As things stand, the two groups hold 82 out of 513 lower house seats, combined. The center-left Workers’ Party, in comparison, has just 53 seats. Based on their current members, a Democratas-PSL merger would also have seven senators, four state governors, and 10 percent of Brazil’s municipal governments.

Negotiators on both sides are expected to zero in on the details of the merger by October, and approval from electoral courts should take about three months. The process has made great strides recently, with the parties calling a joint convention for November 6.

Who will control the purse strings?

Beyond the immediate increase in congressional clout, a Democratas-PSL merger is seen as being financially advantageous for their respective members. In Brazil, the more representation a party has in...