Sao Paulo Last week, Brasilia experienced something of a political routine again for the first time. That hadn’t existed in the Brazilian capital for a long time because of the long election campaign and the turbulent domestic political climate under right-wing populist President Jair Bolsonaro: After the inauguration of Luiz Inácio Lula da Silva on New Year’s Day, the 37 ministers of Lula had been talking for a week presented. Lula spoke to heads of state, negotiated budgets, and planned his next trips abroad.
But the idyll was deceptive. A week after taking office, the ghosts of the past caught up with Brazil. 3,000 radical supporters of President Bolsonaro stormed the government district. They devastated Congress, the Presidential Office and the Supreme Court. And they called for a military coup to oust Lula. “For two years we feared that the Capitol could also be stormed in Brazil,” says political scientist Bruno Carazza from the Dom Cabral Foundation in São Paulo. “Now it has happened.”
Police watched as the situation escalated. Only after three hours did special police forces end the chaotic activity.
The military supports Bolsonaro
The majority of the military and security forces in Brazil are still behind ex-Captain Bolsonaro, even though he withdrew completely from the public eye after his defeat at the ballot box. On December 30, Bolsonaro even flew to Florida so as not to have to attend the handover ceremony, as he said – but also, it was said before New Year’s Eve, so as not to be held responsible for any excesses by his supporters.
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The fears have proven to be realistic. The storming of the government district is a first test for the Lula government: because it is obvious that one of the most difficult tasks will be to limit the military, who have gained control of power under Bolsonaro, back to their defensive function. Democratic foreign countries came to Lula’s aid: US President Joe Biden, French President Emmanuel Macron and EU foreign policy chief Josep Borrell assured Lula of their solidarity.
>> Also read here: Storming of government quarters – President Lula distrusts the military
Statements of solidarity also came from Germany: This is no coincidence. Because Berlin is planning to revive the strategic partnership with Brazil, which has been dormant since 2015 and later suspended under Bolsonaro – after all, Germany has one of its few non-European strategic partnerships with Brazil.
Brazil is Germany’s most important trading partner in South America and by far the most important target country for investments by German companies on the continent. São Paulo is still considered one of the largest industrial cities for German companies beyond national borders – for example, the corporations Siemens, BASF, Volkswagen, Bayer and SAP are based there. Conversely, Germany is Brazil’s most important European economic partner.
In addition, Brazil has become more important for Germany as a result of the Ukraine conflict, China’s intensified competition with the West and the fight against climate change: Brazil supplies food to the whole world, some of which is now missing due to the Ukraine crisis. It has raw materials and energy that are crucial for electric car batteries – in addition to iron ore, the country will soon export lithium and green hydrogen in large quantities.
In order to revive the traditionally good relations with Brazil, Berlin has launched a diplomatic offensive. Federal President Frank-Walter Steinmeier was one of the few politicians from Europe to travel to the change of government. Environment Minister Steffi Lemke was also present. Chancellor Olaf Scholz wants to travel to Brazil, Chile and Argentina at the end of January. Foreign Minister Annalena Baerbock plans to follow in February. And Economics Minister Robert Habeck has also promised to take part in the German-Brazilian Business Days in March.
Now there is growing concern among German companies that Brazil could become unpredictable. For Germany’s automaker, Brazil has long been an important production site and by far the most important sales market in South America. Volkswagen, for example, is a traditional brand in the country and has four of its own plants on site. In Brazil, Wolfsburg recently sold more cars than in France, Spain or Italy.
Volkswagen is committed to “defending Brazilian democracy”
Brazil is also the most important market in South America for trucks. The group is correspondingly concerned in view of the current riots. The Traton truck division, for example, says it rejects the violent attacks on democratic institutions.
A group spokeswoman adds that Volkswagen is committed to “defending Brazilian democracy” and will continue its “long-term cooperation with the current government”. In its 70 years on the ground, VW has “built strong, respectful relationships with all heads of state to create jobs, income and innovation for the local automotive sector and the Brazilian economy.”
Siemens Energy is also concerned. “As in many South American countries, the potential for renewable energies and also for hydrogen is great, so political stability is fundamentally important,” said the Dax group. With more than 2000 employees and various production sites, Brazil is the company’s most important location in South America.
At the chemical company BASF, it was said that the situation was being “monitored” closely. The company operates eight production units as well as 24 research and innovation centers and mini-farms in Brazil and employs 4,245 people.
>> Also read here: Uprising in Brasilia: The strongest opponents of democracy come from within
The federal government is also following the events in the Brazilian capital with dismay. In Berlin, people are wondering what situation Lula will be in when the Chancellor and his most important ministers hold talks with him after the orgy of violence in Brasilia: But according to political analysts, the chances that he will emerge stronger from his first crisis are not bad will.
This should also be good news for the German companies active in Brazil. In fact, Brazil’s top industrial, banking and corporate groups have unanimously condemned the violent actions in Brasilia – although some of these pressure groups have shown great sympathy for Bolsonaro in the past and viewed the leftist Lula with skepticism.
The President of the German Chamber of Commerce in São Paulo, Manfredo Rübens, who otherwise refrains from making any political statements, made it clear: “As the official representatives of German business in Brazil, we know that dialogue and economic development between the two nations are only possible if Democracy, mutual respect and cooperation prevail.”
Analysts do not expect permanent problems
The investment bank JP Morgan expects that the events could push Lula further to the left politically, because the right-wing opposition has been discredited after the storming of the government district. “But Congress continues to be dominated by the centrist parties, which, at least in theory, represent a force against radicalization,” says Matheus Spiess, analyst at the investment bank Empiricus.
He is confident that Brazil will not descend into chaos in the coming months. The violent actions had failed to have the desired effect, “they will not overthrow the government with it”.
More: US politicians are calling for Bolsonaro’s expulsion to Brazil