Lula is old. He is irritable. He doesn’t talk shop with long-time political colleagues any more. Access to this one-time political schmoozer now must go through his wife Janja, who controls his mobile phone. Isolated in his presidential palace, he has little idea of the dangers posed by the political crisis forming outside.
Such is the portrait of Brazil’s 79-year-old president doing the rounds as the media tries to explain the recent precipitous fall in his poll ratings. With just 24 per cent now approving of the job he is doing, the old union boss has never been as unpopular at any other time during his three terms in office.
Meanwhile, the opposition is on the march. Congress, already something of a runaway train, keeps squeezing the executive. Its appetite for an ever bigger slice of the budget is insatiable, further limiting Lula’s room for political manoeuvre. Some of its far-right members are already demanding he be impeached. Though most of their caucus remains focused on defeating Lula in presidential elections next year, in an era when the far right is expert at manipulating social media for its nefarious ends, such calls may well escalate.
Only recently Lula was forced to abandon a sensible policy to combat online fraud after it was targeted by a far-right misinformation campaign across social media. Seemingly unable to counter such campaigns, and suspecting Facebook owner Meta provided a helping hand to the administration’s opponents, his Workers’ Party wants legislation that would regulate social networks and Lula is minded to oblige.
Many would welcome the move, but it risks broadening the conflict Elon Musk and Mark Zuckerberg already have with the Brazilian judiciary into one between the administrations in Washington and Brasília, just as Lula’s team formulates a response to US president Donald Trump’s tariffs on some of its country’s exports to the United States.
At first glance, the precipitous fall in Lula’s approval rating looks odd. The economy has been humming since he returned to office and Brazil is close to full employment. But many economists claim much of this is due to unsustainable public spending that is already fuelling inflation and pushing up food prices for the poor.
Now the administration is in a bind. Traditionally, Brazilian governments rein in spending on coming into office before throwing open the taps in the run-up to elections. Lula’s decision to invert the process and run large budget deficits after returning for a third term in 2023 was logical considering the panorama of chaos he inherited from his far-right predecessor, Jair Bolsonaro.
A generous dose of fiscal largesse was designed to re-establish a sense of social peace after a lost decade economically. But now markets are increasingly concerned by the country’s growing debt pile. The cost of servicing this is rising as much of it is linked to interest rates, jacked up above 13 per cent to combat inflation.
This scenario has many economic actors calling on the administration to immediately curb spending, something Lula and his Workers’ Party are reluctant to do, already being buffeted by political headwinds as they are.
Many on the left, who harbour a visceral loathing for Faria Lima – Brazil’s Wall Street – say market actors are exaggerating the problem for politically motivated reasons. Brazil, they argue, is no Venezuela or Argentina, the region’s two economic basket cases. They also say that at the end of last year, finance minister Fernando Haddad unveiled a fiscal package that he said underlined the government’s seriousness when managing the national accounts.
Yet still, the sense of an administration being dragged in the wake of events rather than directing them persists. For now, Lula seems determined to focus on social spending rather than bow to markets and go beyond the cuts Haddad has already announced. The gamble appears to be to do enough to prevent the return of the far right in 2026 and then if necessary deal more rigorously with the national finances.
It would be foolish to discount Lula, a seasoned campaigner and still a charismatic leader, at the halfway stage of his term. In Brazil, only the malevolently incompetent Bolsonaro has failed to win re-election to the presidency.
Traditionally, the advantages of incumbency trump unpopularity. But even with Bolsonaro ineligible to run and now charged with attempting a coup in 2022, next year’s elections promise to be another white-knuckle ride for a country still deeply polarised along ideological lines. Lula is indeed old and appears grumpy at a world no longer the same as during his golden years when he was first in power two decades ago. Yet he will likely have to saddle up once more.
The Workers’ Party has no natural successor waiting to take up the fight.
For a movement that played a central role in saving Brazilian democracy from the authoritarian designs of Bolsonaro, but with the far right still on the march globally and plotting its return to power in Brazil next year, this increasingly appears a case of gross negligence.
