Investigation of Brazilian president roils politics in Brasilia. French legislative elections heat up as Macron finalizes cabinet and list of candidates. NATO summit likely to be tense with Trump’s arrival. Protests continue in Venezuela. All in The Week Ahead.
Investigation of Brazilian president roils politics in Brasilia
Last week, the Brazilian Supreme Court formally authorized an investigation of President Michel Temer, after a story from O Globo showed the President supported bribing former Brazilian House speaker and fellow PMDB lawmaker Eduardo Cunha in exchange for his silence on the Operation Car Wash scandal. Cunha is currently in prison, and the tape, which suggested Speaker Cunha continue to receive hush payments for not revealing the misdeeds of lawmakers who were not at that point under investigation, was presented to federal prosecutors by the chair of Brazil’s largest meatpacking company Joesley Batista in anticipation of a future plea deal.
The immediate firestorm of criticism has the power to destabilize Congressional politics and halt reform efforts undertaken by President Temer and the PMDB and right-leaning parties in the Congress. President Temer has sworn to remain in office even as calls for his resignation rise and discussions of impeachment have begun to circulate in Congress.
Any major change in power could substantially reduce the effectiveness of Congress as any successor moves to re-create a successful cabinet amidst street protests and a hyper-vigilant media and judicial scrutiny. Mre than one third of President Temer’s cabinet is currently under investigation. President Temer’s investigation is likely to reduce any incentive for opposition parties to work with him on reform efforts, and could provide incentives for coalition partners to defect, knowing his days may be numbered.
French legislative elections heat up as Macron finalizes cabinet and list of candidates
Following the election of Emmanuel Macron as president, his newly-renamed party La Republique en Marche has moved aggressively to field candidates for the French Assembly’s 577 seats. The candidates represent a broad array of French society, with candidates pulled from a multitude of professions outside the political realm, and substantial representation of women reflective of the diversity of his cabinet.
Recent polling suggests Macron’s new party has the potential to blow a severe hole in the Socialist Party, with smaller damage to the Republicans, and though it may not secure a majority it is likely to receive the highest number of seats. Former National Front (FN) presidential candidate Marine le Pen has announced she will run for a seat in the Assembly, hoping to establish herself and her party as the lead opposition to the Macron government, particularly as the two major parties, the Socialists and Republicans, are likely to undergo some substantial re-tooling as they try to reestablish their roles at the national level. The FN is also expected to make gains in the Assembly, though the current numbers do not suggest securing any more than 30 members.
The next few weeks for the two largest parties will be critical: heading into the June elections do the parties establish themselves preemptively as opponents to the Macron government, or supporters of it?
NATO summit likely to be tense with Trump’s arrival
On Thursday, Trump is planning on meeting with NATO leaders in Brussels, in his first official visit to Europe since his election. The meeting is likely to be tense as other NATO nations wonder what approach the mercurial and inconsistent president is likely to pursue. After previously calling for a withdrawal from NATO, claiming it was obsolete and other nations did not pay their fair share, the administration has since walked these comments back. NATO leaders are apparently preparing reports that coincide with the alleged short attention span of the president, which may be sufficient for him to continue valuing the nearly 70-year military alliance — he is currently expected to support NATO in his speech.
His speech to the assembled guests, however, is expected to be written by one of his chief advisors Stephen Miller, a persistent NATO critic. Should Trump adopt a more hardline attitude towards NATO, this would undoubtedly cause tensions in Eastern Europe where Russia remains a consistent and substantial security threat and lead to some concerns among major NATO allies like France and Germany.
Protests continue to erode Venezuela
Protests are likely to continue throughout Venezuela this week, as what had begun as a protest against the usurpation of the powers of the National Assembly by the Maduro-backed Supreme Court has morphed into a much larger anti-Maduro movement. Chronic shortages of food, consistent hyperinflation, the relative powerlessness of the Assembly, skyrocketing unemployment, and the unpopularity of the President has prompted over a month of peaceful and non-peaceful protests. Unlike the 2014 protests, the current protests cut across all demographics and age groups.
The Maduro government has consistently argued that the economic perils of a country with one of the largest oil reserves on Earth represents an economic war waged by the United States and other “enemies” of Venezuela, though this argument does not appear to carry much weight in Venezuela at this point. Maduro has responded harshly, with national troops and police forces using rubber bullets and tear gas to disperse protestors: as of last weekend, 43 people had been killed during the protests (the same number killed in the 2014 protests, though in half the time). There does not appear to be any end in sight, though Maduro has pledged to rewrite the nation’s constitution, a proposal firmly rejected by the opposition, and the OAS is planning on a meeting of foreign ministers to discuss the issue (Maduro has announced Venezuela would be withdrawing from the OAS).
The Week Ahead provides analytical foresight on the economic consequences of upcoming political developments. Covering a number of future occurrences across the globe, The Week Ahead presents a series of potential upside/downside risks, shedding light on how political decisions affect economic outcomes.
This edition of The Week Ahead was written by GRI Analyst Brian Daigle.