The right-wing around President Jair Bolsonaro has won a landslide in the first round of elections in Brazil. Ex-President Lula continues to lead. Europe must adjust to a changed partner country.
by Alexander Busch, Latin America correspondent for Handelsblatt and Neue Zürcher Zeitung
The elections in Brazil were eagerly anticipated throughout Latin America. What happens in Brazil politically and economically has a strong impact on the region because of the dominance of the Brazilian economy and the size of the country and population.
After the first round of voting on October 2, changes have already taken place that will be decisive for South America regardless of the outcome of the runoff elections on October 30.
There were two surprises: On the one hand, President Jair Bolsonaro won significantly more votes than predicted in the polls. Instead of around 34 percent, 43 percent of voters opted for him. On the other hand, the right around President Jair Bolsonaro experienced a nationwide landslide victory in Congress and the states.
This means that a political turning point is currently taking place in Brazil: Bolsonaro has proven that he is not a right-wing populist flash in the pan politically. Like his role model Trump in the U.S., he has firmly anchored Brazil’s conservative turn, which is partly radical right-wing, sometimes economic liberal or simply conservative in values, in politics.
In doing so, he has put the brakes on the leftward turn that is otherwise taking place in South America. Currently, only the small states of Ecuador, Paraguay and Uruguay are governed conservatively. In Chile and Colombia, left-wing governments have been elected to power this year.
The changed political constellation in Brazil will endure even if Bolsonaro himself is not elected on October 30. This is because ex-president Luíz Inácio Lula da Silva still has a good chance of winning in the runoff elections at the end of the month. He received 48.4 percent of the vote. He fell just short of two million votes for a victory in the first round of voting. However, Bolsonaro’s election victory is also still very possible.
The financial markets reacted positively to the result: the stock market rose, the dollar fell and risk premiums on Brazilian bonds declined.
On the one hand, the positive reaction can be explained by the fact that the business community, in which many back Bolsonaro, now continues to hope that the president will win the election.
On the other hand, Lula has not now received the blank check he had hoped for. So far, he has only been evasive about his choice of personnel and ideas about the economy. Lula must now show his economic colors in order to win more votes from the center and the business community.
Moreover, with the conservative Congress and many states in the hands of Bolsonaro confidants, Lula has been presented with powerful controllers: He must negotiate, form coalitions and cannot simply govern through.
For Europe, however, the political conservative turnaround in Brazil also means that the politically sensitive issues on the common political agenda will not simply disappear with Bolsonaro’s ouster. On the contrary, after the shift to the right in politics, it hardly looks as if laws and institutions can be revived in the foreseeable future to protect the Amazon or the environment.
In the event of Bolsonaro’s election victory – which remains a possibility – the president could even push through his ideas much more easily in his second term with a majority in Congress and many states.
Europe should start thinking about how it wants to respond to the changed Brazil.