Stepping into outsize shoes

BLOCKED by term limits from running for president for the first time since 1989, Luiz Inácio Lula da Silva joked in March that he would fill the electoral void by changing his name to Dilma Rousseff and putting that on the ballot instead. The strategy worked. Thanks to his endorsement, Ms Rousseff, his former chief of staff, won a run-off on October 31st to become Brazil’s first female president, beating José Serra of the Party of Brazilian Social Democracy by 56% to 44%. Ms Rousseff, who has never before held elected office, will now have to show whether she is a mere proxy for Lula or a leader in her own right.

Since the vote, the president-elect has focused on reassuring the country that she will provide continuity. After Lula was elected in 2002 investors dumped Brazilian assets, fearing that the former socialist firebrand would scrap his predecessor’s orthodox macroeconomic policies. Instead he stuck with them, providing the stability needed for the country to boom.

Ms Rousseff faces similar worries. She belonged to a guerrilla group that fought Brazil’s military dictatorship in the 1960s. She comes from a wing of the Workers’ Party (PT) that is particularly keen on state industrial policy and intervention in the economy. Most of her supporters came from the poor north and north-east, and her staunchest backers in the more developed south were government employees. Richer and better-educated voters, along with private-sector workers, mostly plumped for Mr Serra instead.

To comfort these groups, she described her economic plans the day after the election as “nothing that makes waves or creates confusion”. But her thin record means that her early appointments will come under extra scrutiny. Investors hope she will persuade Henrique Meirelles, the hawkish governor of the Central Bank under Lula, to stay on. They will also pay close attention to Antonio Palocci, who oversaw Lula’s embrace of market-friendly policies as his first finance minister and is part of Ms Rousseff’s transition team. If Ms Rousseff chooses him to be her chief of staff, or better yet, returns him to the finance ministry, her standing with businessfolk will soar. If he ends up in health or education, they will be sceptical.

Once she takes office on January 1st, critics will probably focus on an area where some differentiation from her predecessor might be welcome: handling the public purse. Despite strong tax receipts, the government will balance its books this year thanks only to the sale of oil concessions and some creative accounting. Since the election Ms Rousseff has preached fiscal responsibility. However, she also supports new spending on the poor.

To keep both promises, she will have to trim the fat from those parts of the budget that Lula left alone, such as public-sector pensions. But attacking such generous perks would anger her base and the unions, who are still a considerable force in the pt. “It’s hard to see anything that justifies the belief that she is serious about greater fiscal discipline,” says Mauro Leos of Moody’s, a ratings agency.

On paper, if Ms Rousseff does decide she is ready for a fight, she will have a better chance of getting her way than Lula did. Unlike her predecessor, she will command a congressional coalition with the three-fifths majorities in both houses needed to amend the constitution. The PT also holds more state governorships than it did under Lula. And though Ms Rousseff’s margin of victory was smaller than Lula’s, she still has a strong mandate.

Even so, the new president will find it hard to impose her will on her party and coalition. The PT owed its position in government to Lula, and knew it. But Ms Rousseff is indebted to those who helped her rise to power. And without a leader bigger than the party, the PT’s out-and-out socialists will be more likely to squabble with its social-democratic reformers. Moreover, Ms Rousseff is new to coalition horse-trading. The PMBD, a wily grouping of regional barons that is the PT’s main partner, will probably try to take advantage of her inexperience to satisfy its appetite for pork and spendthrift ministries, even though it lost seats in the election.

The man who could help her surmount these hurdles is Lula himself. He says he will fade into the background. But that seems unlikely: reports on his preferences for Ms Rousseff’s appointments have already surfaced in the press.

For now, the president-elect is handling the situation graciously. “I will often knock at his door and I’m sure I will always find it open,” she said in her acceptance speech. But letting Lula remain the power behind the throne would set a bad precedent—Brazil instituted term limits for a reason. Ms Rousseff will have to convince the doubters that she is not simply Lula in lipstick.