Brazil, the Lula-Bolsonaro conflict will overturn reality. All relations with Italy

Just like two years ago, the supporters of Donald Trump on Capitol Hill were defeated on Sunday, January 8th. Jair Bolsonaro They took to the streets of Brazil and destroyed the institutional buildings of democracy. Rioters dressed in the colors of the national team broke into the congress, the presidential palace and the court of Brazil and stole the original text of the 1988 Constitution. Luiz Inacio, the newly elected president of Araraguara, where he made his first official visit Lula da Silva issued a decree on “federal intervention” that placed all security forces in the capital under the control of the executive secretary of the Ministry of Justice, journalist Ricardo García Cappelli.

Less than 24 hours after the events, more than 1,200 arrests, a lot of material damage to public buildings, destruction of historical and artistic assets and dismissal of the governor of the Federal District, Ibanez Rocha. And in the markets warning to foreign investorsIt is increasingly concerned about the volatility of the South American economy.

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Caution prevails among foreign investors

The beginning of Lula’s third term brought difficult times to the new president. After narrowly defeating Bolsonaro in the runoff, Lula now faces a divided parliament (and country). The president reiterated his intention in his inauguration speech raise spending limits laid by constitutional roof. The measure, necessary to fulfill costly social investment promises made during the election campaign, is extremely dangerous at a time when the European Union is in the process of adopting a sustainable development policy. public finance remains fragile and inflation – 5.9% in November, with the December figure on the agenda this week – still far from the central bank’s target. Added to this is the fear of a global recession, exacerbated by monetary tightening.

This was reported by the Brazilian economic newspaper Valuethe international banks signs of concern about the new government’s plans began to appear. After a rough start Bovespa It regained ground in the second half of last week, digesting Lula’s statements about the role of the European Union in the global economy. public companies to revive the country. After the riots, the Paulista index ignored the difficulties of the first half of the session, remaining around parity at 109,071 points. But according to a local paper, the 8th market unrest could add more short-term volatility to Brazilian assets, especially institutional risk by foreign investors. As analysts EburyBrazil has a history of political turmoil that has had a significant impact on Brazilian assets in the past. “The he blushedoh capital probably among foreign buyers who are new to the market there is a possibility of cancellation and investors should wait for the political and fiscal scenario to align,” says Eburi. Increased political and institutional risk could prevent gains in the stock market.

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Dollar’s response came just in time. According to hearsay by another São Paulo manager ValueThe Stars and Stripes currency is “about to rise” against the euro. Brazilian realbut with a jump that won’t last long. The US currency rose against the real and brought the exchange rate to 5.2863 reais. According to Eburi, the dollar-real parity and interest rates may be affected by the exit from the national currency and the increase in the premium by investors to protect against the deterioration of country risk.

Italian companies operating in the country will not be affected

According to the latest update from the website of the Ministry of Foreign Affairs, the Tim in the country is mainly responsible for Brazilian telecommunications, Enel, Eni, Avio, Stellantis, Fincantieri, Pirelli, Prysmian, Webuild, Azimut, Generali, Campari, Intesa Sanpaolo , EssilorLuxottica , Safilo and Technogym. “It is necessary to return to the real political debate, refraining from resorting to these strategies, which are not appropriate for a large country like Brazil,” he comments. Giacomo GuarneraFounding partner of Guarnera Advogados and president of Promo Brasile Italia, an association promoting economic and cultural relations between the two nations. However, given the government’s clear and democratic response, we currently do not see any economic consequences for Italian companies.”

Lula’s accusation and Bolsonaro’s sudden response

There was no example of what these people did in the history of our country. We will find the culprits and punish them,” the president said at a press conference immediately after the incident. “They will pay the penalty for these irresponsible acts of vandalism to the full extent of the law, undemocratic e of fascist origin“. The head of state pointed the finger at the Federal District police, calling him “incompetent and malicious”.

Bolsonaro has been rejected since December 30 in Miami, a tweet Accusations by a rival: “I reject the accusations leveled at me by the current executive of Brazil without any evidence” can we read on his profile, he still appears to be the federal president of the republic, a candidate for re-election. – Election No. 22. Bolsonaro distanced himself 8, referring to the violence on Sunday, declaring that “peaceful protests that respect the rule of law are part of democracy.” However, what happened today, as well as the depredations and attacks on public buildings carried out by the left in 2013 and 2017, are outside the “rule”. While lying in hospital in Paris, the ex-president reminded his followers on Twitter of the achievements of his government during four years. AdventHealth Celebration He was hospitalized today in Orlando, Florida after complaining of severe abdominal pain. After undergoing surgery in 2018, Bolsonaro was repeatedly hospitalized for the same reason. According to the Brazilian newspaper, the last episode happened in November last year Hey Globo.

“This is clearly bad for any investor’s image of the country,” commented the interviewed banker. Value attacks should be viewed “as an act of vandalism rather than as a real threat to institutions.” As the government looks for the perpetrators and financiers of the attacks, even among politicians, part of the market points the finger at the people below. incompetence of public security forces. “We will see how things develop in the next few days, which will determine the impact on the market,” the banker concluded. ()

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