The leading index of Sao Paulo's stock exchange Bovespa dropped on Wednesday 3,78% to 113,413 points in reaction to Tuesday's “anti-democratic” speeches from Brazilian president Jair Bolsonaro, and his attacks on the Federal Supreme Court, STF, precisely on Tuesday 7 September, Independence Day.
The fall was the largest since March 8, when the STF threw out the convictions against ex-president Lula da Silva. Brazilian markets have become highly sensitive to the political scenario, and in the first week of September, the Bovespa index has slid 4,52%, while the US dollar had a steep increase in value on one day, 2,93% to R$ 5,3276.
The clash between the Brazilian president and the highest court of the land is having unexpected consequences, political, economic and financial.
On Independence Day and in several rallies in Brasilia and Sao Paulo, Bolsonaro attacked members of the STF, Alexandre de Moraes and Luis Roberto Barroso who also is president of the Superior Electoral Tribunal. Bolsonaro in the speeches to his tens of thousands of supporters played with the threat of a coup, criticized the electronic voting system as fraudulent, and also blasted mayors and governors who adopted lockdown measures to combat the Covid 19 pandemic.
Bolsonaro all along has been against the lockdowns, arguing the damage to the economy and activity are far worse, and repeatedly challenged authorities mingling with the people without a mask.
But the president on Tuesday focused his attacks on STF member Moraes anticipating he will not abide by his decisions, and to the cheers of crowds said only God would remove him from office
However, Bolsonaro's threats during Independence Day were strongly rejected by elected governors and members of Congress, with growing support for possible impeachment of the president. There are fears that the confrontational atmosphere will lead to slower recovery of economic activity and jobs in Brazil.
The president of the Lower House of Congress, and a Bolsonaro ally, Arthur Lira commenting on the anti-democratic speeches of Tuesday called for a pacification among branches of government, and reiterated that Brazil has a un deferrable commitment with the electronic ballot on 3 October 2022.
The president of STF, Minister Luiz Fux, said that nobody is going to close down the Federal Tribunal and that contempt of court decisions by any head of a government branch is committing a responsibility crime
This Federal Tribunal will never accept threats to its independence or intimidations to its regular functioning. No one is going to close the Court, we remain standing up, with toil and perseverance underlined Minister Fux.
The STF also pointed out that offending the honour of Ministers, inciting crowds to propagate hate speeches against the institution of the STF means promoting the non-compliance of judicial decisions, all anti-democratic and illicit practices, which we simply can't tolerate out of respect for our constitutional oath when taking a chair in the Court
The crime of responsibility must be analyzed by Congress, despising court decisions is an attack on democracy, and this STF will never tolerate threats against the authority of its decisions, concluded Minister Fux.