Finance capital’s ultimatum to Lula in Brazil: Impose austerity or your victory “will turn to ashes”

by Tomas Castanheira

Part 4 - The Broad Front prepares to obey

The government did not wait for the inauguration to respond. On Tuesday, Finance Minister Dario Durigan signaled that fiscal adjustment measures will soon be announced by the new government team now being formed.

Among the names most often mentioned to head the Finance Ministry are Vice President Geraldo Alckmin, presented during the campaign as the man who understands fiscal adjustment, and Rafael Fonteles, PT governor of Piauí and one of the coordinators of Lula’s runoff campaign. Known as the “Tarcísio of the left”—a reference to Tarcísio de Freitas, the Bolsonarist governor of São Paulo—Fonteles privatized the state’s sanitation services, granted highway concessions and imposed a 10-year spending cap.

The pseudo-left is already supplying the rationalization. In an article published after the election, Leonardo Attuch, editor of Brasil 247, one of the main media outlets aligned with the PT, argues that fiscal adjustment “should not be taboo” in the fourth term. “It must be recognized that fiscal responsibility is not the exclusive banner of the right, the banks or the financial market,” he writes, before going on to sell the cynical notion that austerity would be beneficial “especially for the poorest.” Fiscal responsibility, he concludes, “should not be seen as a concession to the market.”

The Broad Front government—the coalition that brings together the PT and parties of the traditional right—is cornered. By its very character as a coalition government of the Brazilian bourgeoisie, it is bound to impose the agenda of capital. But the workers and young people, who secured the turnaround in the runoff, voted expecting a government that would serve their interests. Lula will seek a path of half-measures in which there is very little room to maneuver. The longer the subordination of workers and young people to this government and its trade union and political apparatuses continues, the more disillusionment will turn into demoralization—the ground on which the far right grows stronger and on which the next coup is being prepared.

Source, links:

https://www.wsws.org/en/articles/2026/10/30/sdph-o30.html

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