Coalition Building

December 2006 | Risk Summary

Our short-term political rating for Brazil, which reflects, in part, the smoothness of political succession and the capability of policy-making has remained stable at 75 this month. Whilst the initial indications were that Lula's failure to secure and outright victory in the first round, combined with mixed results for his allies in the congressional elections, could potentially weigh on his government's ability to pursue reforms, the outlook has improved since his election on October 29. Lula has recently brought a unified PMDB (Brazil's largest party) into his governing coalition, which will make passing reforms an easier task. Furthermore, Lula has

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