Senate approves Security PEC in 1st round while US election reignites debate on Brazil

The Senate approved the Public Security PEC in the first round, on Tuesday (3), with 73 votes in favor and none against. In the same debate, Gazeta do Povo analyzed how the election for the American Congress, which gave partial victory to the Democrats, could affect Washington's relationship with Latin America and the Brazilian right.

According to Gazeta do Povo, the result could complicate Donald Trump's internal political life in the last two years of his term. For Daniel Vargas, from FGV, the American president's difficulties at home are not trivial, although Latin America is the declared priority of the current administration.

The debate also dealt with the effect on the regional scenario and the future of Flávio Bolsonaro (PL), described as a former candidate. Vargas stated that it is not clear to what extent Trump will act in favor of Flávio.

Jurist Frederico Junkert assessed that Trump was cautious in relation to Brazil and that Flávio's trip to the United States mobilized the conservative electorate. For him, even with the Democratic majority in Congress, there is no sign of change in the American view of Latin America.

Domestically, the vote was scheduled for before the second round, after the approval of a special calendar, but the matter was removed from the agenda without consensus on the age of criminal responsibility. The reduction in the criminal age was left out of the original text and should be processed in a new PEC. Vargas recalled that security is an issue historically defended by the right and said that the PT left the age of criminal responsibility aside, which he called an “honorable exit”.

Junkert made reservations about the text. He criticized the attribution of powers to the federal government, said that the measure was approved without broader discussion and noted that it creates a “single security system”. He defends a new federative pact to organize the issue.

What changes for the investor

The information collected does not provide an estimate of the fiscal cost of the PEC or a projection of the effect on assets, and this text does not indicate a direction for prices. The point of attention for those who follow the stock market, interest rates and the dollar is uncertainty. An American Congress with a Democratic majority could limit Trump's agenda, but Junkert's reading suggests that Washington's vision of the region may not change immediately. In Brazil, the discussion about competences and security financing, added to the issue of the age of criminal responsibility, still depends on a defined text and cost for the market to assess its impact on public accounts.

Automatically translated from Portuguese.