White House under pressure to expel Bolsonaro

This is an audio transcript of the FT News Briefing podcast episode: ‘White House under pressure to expel Bolsonaro’

Marc Filippino
Good morning for the Financial Times. Today is Tuesday, January 10th. And this is your FT News Briefing.

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Joe Biden’s administration is under pressure to send Jair Bolsonaro back to Brazil. French president Emmanuel Macron is going ahead with one of the riskiest moves of his political career. And China’s government is changing what kind of companies are allowed to list on its stock market.

Sun Yu
You can’t just make profits. You need to meet the national goal as well.

Marc Filippino
I’m Marc Filippino. And here’s the news you need to start your day.

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The White House is under pressure to send Brazil’s former president, Jair Bolsonaro, back to Brazil. Bolsonaro has been in the US state of Florida for the past two weeks, so he was there when thousands of his supporters stormed Brazil’s capitol this past Sunday. They were protesting last year’s presidential election, which Bolsonaro lost. To find out more, I’m joined by our Latin America editor, Michael Stott. Michael, do we know who is pressuring the White House to send Bolsonaro back?

Michael Stott
At the moment, it appears to be lawmakers from the left in the United States. There’s also one Brazilian lawmaker elect from the left who’s, who’s asked for Bolsonaro to be sent back. But as of now, there’s no legal request from a competent Brazilian authority like the Supreme Court or the Justice ministry. I think Bolsonaro’s bigger problem is that he appears to have entered the US on a diplomatic visa, which would give him some protection while he was president. But of course he ceased to be president on January the 1st and he’s now a normal citizen.

Marc Filippino
I’m curious, what is Bolsonaro doing in the US anyway?

Michael Stott
Well, he left for the US on the 30th of December just before his term in office ended, because he wanted to avoid being in Brazil when President Lula took power. And he went to Florida and has been staying at the house of a friend there, and the US state department spokesman did say that foreign leaders or diplomats who entered the country on diplomatic visa have 30 days to leave the US or seek an updated visa if they’re no longer on official business. And of course, Bolsonaro is no longer president of Brazil, so he’s now a private citizen.

Marc Filippino
So what could happen to Bolsonaro if he goes back to Brazil?

Michael Stott
He faces a number of legal investigations into his time in the presidency. And they run from, for example, his behaviour during the pandemic when he was in denial about the seriousness of Covid and presided over a very chaotic effort against coronavirus, which saw more than 700,000 Brazilians die. So there could also be legal charges arising if authorities are able to just determine any connection between Bolsonaro and these riots. But so far, that’s still under investigation.

Marc Filippino
Michael Stott is the FT’s Latin America editor.

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French president Emmanuel Macron is set to announce a draft law today. It will overhaul the country’s costly pension system and raise the retirement age. Currently, French people have to work until they’re 62 before they can receive a full pension. Many people are not happy about the idea of having to work two or three more years. To find out more, I’m joined by our Paris bureau chief, Leila Abboud. Hi, Leila.

Leila Abboud
Hello.

Marc Filippino
So quickly, why does Macron want to overhaul the pension system?

Leila Abboud
Yeah. You know, like many countries, France’s demographics are changing and there’s fewer workers per retiree now than there was about 20 or 30 years ago. And the system functions because basically current workers finance the retirements of people who are not working anymore. So it’s gonna have deficits in the coming decades if nothing is done. And also, France devotes about 14 per cent of GDP to paying for retirements for its older people, which is a higher proportion than the European average and most other countries in Europe.

Marc Filippino
And what happens if he doesn’t get it done, Leila?

Leila Abboud
I mean, this is a pretty sort of totemic issue for Macron now. It’s become something which he tried to do in his first term and he failed. And, you know, five years later, he’s still trying to do this thing, which is actually really, really important to the public finances and to employment. And if he doesn’t get it done, it’s really gonna look — I don’t want to say make him a lame duck — but it’s just gonna prove that his second term is gonna be much less fruitful than his first term if he can’t do this thing he’d been wanting to do for five years.

Marc Filippino
So he’s failed before, Leila, to get this done. And this time he doesn’t have the numbers in his alliance to pass the law. Can he get support from other parties?

Leila Abboud
And there’s a way to do it, potentially. There is this sort of conservative party that’s called the Les Républicains — they’re sort of, you know, centre right or even just conservative. And they have long been in favour of raising the retirement age. He’s gonna hope that he can peel off their votes. You know, we’ll see in the coming weeks whether he’s able to sort of formalise a deal with them in order to get their votes. But I’d say it’s on, it’s on a decent track. The real problem may not actually come in Parliament, may come in the streets, because France has a real tradition of protests and strikes and the unions here are united in their opposition to any rise in the retirement age at all. And, you know, I think we’re gonna have to wait and see, to see whether that sort of social protest movement takes off or if Macron’s government is able to impose something with enough sweeteners to make the painful stuff go through, that maybe he can avoid the worst of the strikes. We’re not gonna be able to avoid all of it. There will definitely be some protests in the coming weeks. We just have to see how bad they, they get.

Marc Filippino
Leila Abboud is the FT’s Paris bureau chief.

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China’s financial regulators are set to block certain domestic companies from listing on the country’s stock exchanges. This comes as Beijing is trying to channel funding into industries that serve the government’s goals. The FT’s China economics reporter Sun Yu broke this story. He says China’s securities regulator is putting companies into categories.

Sun Yu
The first category is called the “red light” category, which is the kind of industries that will be off limits to appeals in a foreseeable future because of the perceived investment risks or because of the fact that they don’t really help with the official strategic investment agenda. And they will include food, restaurant chains, strong alcohols, spirits, PCR testing, private tutors, and then funeral service.

Marc Filippino
So what kind of companies will get the green light to list and get financing through equity markets?

Sun Yu
That would include biochemistry and then advanced manufacturing and also semiconductors and the like — the industries that China needs the most to rival the US. The idea is that there’s limited amount of funds on a stock market and many of these tech companies that the government supports, they don’t do well financially. So it would be a bit tricky for them to draw attention from investors. In contrast, the so-called red industries, they would include many companies that are actually quite profitable. So in a perfectly market-driven environment, investors would naturally flow into those areas that may not be favoured by the authority. They want investments to go into the areas that they think would hold key to China’s long term future.

Marc Filippino
So the way I understand is that there is also a “yellow light” category. What are these companies?

Sun Yu
So these are the areas that will come under tighter scrutiny from the stock regulators. They will include apparel, furniture, fashion and then consumer electronics. So the regulator would pick the industry leaders and allow them to be listed. So this is a general trend that the stock market must serve the national agenda, which is to promote China’s strategic industries. You can’t just make profits. You need to meet the national goal as well.

Marc Filippino
Sun Yu is the FT’s China economics reporter in Shanghai.

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You can read more on all of these stories at FT.com. This has been your daily FT News Briefing. Make sure you check back tomorrow for the latest business news.

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