Tough choices as Brazil's Lula gets down to business

Fresh off a celebratory beach holiday, Brazilian president-elect Luiz Inacio Lula da Silva got down to uglier business Monday: figuring out how to govern with a hostile Congress, nasty budget crunch and impossible-looking to-do list.

The political horse-trading of the transition period now starts in earnest for the veteran leftist, who will be inaugurated for a third term on January 1, facing a far tougher outlook than the commodities-fueled boom he presided over in the 2000s.

Lula, 77, celebrated his narrow win over far-right incumbent Jair Bolsonaro in the October 30 runoff election by escaping last week to the sun-drenched coast of Bahia (northeast).

He joked he needed a belated honeymoon with his first-lady-to-be, Rosangela "Janja" da Silva, whom the twice-widowed ex-metalworker married in May.

His other honeymoon -- the political one -- could be short, analysts say.

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Lula is meeting Monday with advisors in Sao Paulo. Tuesday, he will travel to the capital, Brasilia, to start negotiating with members of Congress, allies told AFP.

He faces a battle to get bills passed in a legislature where conservatives scored big gains in October's elections.

Lula's coalition has around 123 votes in the 513-seat Chamber of Deputies, and 27 in the 81-seat Senate, meaning he will have to strike alliances to get anything done -- and even just survive, given the threat of impeachment in Brazil, where two presidents have been impeached in the past 30 years.

Lula is expected to meet in Brasilia with lower-house speaker Arthur Lira, a key Bolsonaro ally from the loose coalition of parties known as the "Centrao," a group known for striking alliances with whoever is in power -- in exchange for feeding on the federal pork barrel.

Analysts say Lula will be under pressure from the Centrao not to oppose the so-called "secret budget": 19.4 billion reais ($3.8 billion) in basically unmonitored federal funding that Bolsonaro agreed to allocate to select lawmakers to boost support for his reelection bid.

Meanwhile, money will be tight for Lula's campaign promises, including increasing the minimum wage and maintaining a beefed-up 600-reais-per-month welfare program, "Auxilio Brasil."

Bolsonaro, who introduced the program, did not allocate sufficient funding to continue it in the 2023 budget.

"We can't start 2023 without the 'Auxilio' and a real increase in the minimum wage," the leader of Lula's Workers' Party, Gleisi Hoffmann, said Friday.

"That's our contract with the Brazilian people."

Facing the impossible math of funding such pledges without breaking the government spending cap, Lula's allies are exploring their options, including passing a constitutional amendment allowing exceptional spending next year.

But they are racing the clock: it would have to be approved by December 15.

Lula, who ran on vague promises of restoring Latin America's biggest economy to the golden times of his first presidency (2003-2010), inherits a struggling economy time around.

"The challenge is... how to balance fiscal responsibility with a highly anticipated social agenda," said political scientist Leandro Consentino of Insper university.

Markets are watching closely -- especially his pick for finance minister.

Lula is expected to split Bolsonaro's economy "super-ministry" into three portfolios: finance, planning, and trade and industry.

"We can expect not-totally-orthodox economic policy, but which maintains a certain level of fiscal discipline," said Adriano Laureno, of consulting firm Prospectiva.

Laureno predicted a political choice for finance minister, a technocrat for planning and a business executive for trade.

Names floated for the finance job include Lula's former education minister Fernando Haddad and his campaign coordinator, Aloizio Mercadante.

Other closely watched portfolios are the environment and a promised new Indigenous affairs ministry -- both sore spots under Bolsonaro, who presided over a surge of destruction in the Amazon rainforest.

The former job could go to Lula's one-time environment minister Marina Silva, credited with curbing deforestation in the 2000s.

In a key gesture, the president-elect will make his return to the international stage at the COP27 UN climate summit in Egypt, where he will arrive next week, advisors said.

Silva, who will travel with him, told newspaper Folha de Sao Paulo: "The climate issue is now a strategic priority at the highest level."