Brazil floods test Lula

Brazil floods pose challenge for President Lula [View in browser]( [Bloomberg]( Welcome to Balance of Power, bringing you the latest in global politics. If you haven’t yet, sign up [here](. Record floods that have [devastated southern Brazil]( are presenting Luiz Inacio Lula da Silva with a defining moment of his presidency. His advisers say he’s keenly aware this may be his “Katrina moment,” a reference to the 2005 hurricane that caught US President George W. Bush off guard and entered the global lexicon as shorthand for the failure of leadership in a crisis. The response to the [devastation is particularly important]( for Lula’s leftist presidency, premised on the philosophy that governments should do more to meet the people’s basic needs. The tragedy has consumed Lula’s government. He traveled to Rio Grande do Sul with top cabinet members and key congressional leaders over the weekend. There, torrential rains sparked floods that have left at least 100 people dead, about 67,000 homeless, and half a million lacking clean water and electricity. Lula surveys the flood damage in Canoas in southern Brazil on Sunday. Source: Ricardo Stuckert/Palacio do Planalto He quickly signed a decree exempting emergency aid from this year’s spending rules. His administration’s agenda in congress, its Group of 20 nations presidency and planning for its hosting of the United Nations Climate Change Conference next year have been shunted to the background for now. With more rain and plummeting temperatures forecast through the week, the challenges will only mount. That may give Lula a chance to re-energize a presidency beset in recent months by internal rivalries, fights with congress, market scrutiny of his spending plans and declining popularity. Public anger over the handling of the Covid-19 pandemic by his predecessor, Jair Bolsonaro, helped propel Lula to a narrow victory in Brazil’s 2022 presidential contest. Now he faces a calamity of his own. Lula’s response could help him regain public approval of his leadership — or propel his presidency into a downward spiral that he can’t escape. — [Travis Waldron]( Floodwater submerges part of a highway in Porto Alegre. Photographer: Carlos Macedo/Bloomberg Global Must Reads “It’s just wrong” is how US President Joe Biden described the potential loss of civilian life if Israel proceeds with a ground invasion of Rafah. Washington will halt additional [shipments of weapons]( to the Jewish state if it goes ahead with the offensive, Biden said yesterday in an interview with CNN. The move marked the Biden administration’s most serious signal of displeasure over the conduct of the ongoing war against Hamas. WATCH: Biden said he would stop additional shipments of offensive weapons to Israel if it proceeded with a ground invasion of Rafah. President Vladimir Putin revived his nuclear saber-rattling against the West as Russia pursues its invasion of Ukraine. “We will not let anyone threaten us. Our strategic forces are always on combat alert,” Putin said today at the [annual military parade]( on Moscow’s Red Square marking the victory in World War II. He ordered his armed forces to conduct combat drills involving [tactical nuclear weapons]( earlier this week. President Xi Jinping wrapped up his trip to Serbia without visiting the site of the former Chinese embassy bombed by NATO forces a quarter century ago, a sign that he’s seeking to prevent ties with the West [from deteriorating]( further. In Budapest, Xi is set to announce a range of new investments as he touts Prime Minister Viktor Orban’s Hungary [as a model]( for what the European Union’s relationship could look like with the world’s second-largest economy. Eclipsed by the wars in Ukraine and Gaza, Sudan’s civil war is a [humanitarian disaster]( that rarely makes headlines. As many as 150,000 people may have been killed since the conflict exploded in April 2023, according to US estimates. The United Arab Emirates and Iran have been accused of providing weapons and financial backing to the warring sides, undermining efforts by the US, Saudi Arabia and Sudan’s neighbors to broker a cease-fire. The UAE denies any involvement. In the capital of a global power, a political system plagued by dysfunction is keeping a country spending beyond its means and on a path of ever-increasing debt. It’s not the US but Belgium, which hosts key EU institutions. The [lack of restraint]( in Brussels overshadowing public finances increasingly resembles that of the world’s biggest economy, but without the impunity that comes with printing the dollar. UK Foreign Secretary David Cameron criticized other European nations in a speech today for being “unwilling” to [invest in defense]( as he urges Western democracies to be “tougher and more assertive” in protecting their interests and values. North Macedonia’s main nationalist party claimed victory in the Balkan nation’s general election, opening the path for a coalition government that [risks hindering already troubled talks]( on joining the EU. The Philippines said geopolitical tensions with Beijing have not affected the Southeast Asian nation’s economy and the government [is still willing to work]( with Chinese investors. Washington Dispatch The adult film actress Stormy Daniels will [return to the witness stand]( at Donald Trump’s criminal trial in New York today, two days after her raucous testimony ruffled lawyers for both sides as well as the justice presiding over the case. The former president’s lawyers plan to resume their cross examination of Daniels, who testified that she had sexual relations with him in 2006. Trump has denied that account, and his lawyers accused her of lying. How believable jurors find her and whether she bolsters the prosecution’s assertion that he falsified business records to conceal their relationship remains to be seen. Acting New York State Supreme Court Justice Juan Merchan denied a defense request for a mistrial, but asked Daniels to avoid providing “unnecessary details.” Trump glared at Daniels and, as the judge pointed out, could be heard swearing during her testimony. Merchan has already twice ruled the former president in contempt for violating a gag order and warned that he could be jailed for further violations. That didn’t stop Trump from expressing outrage on his Truth Social platform. “It is hard to sit back and listen to lies and false statements be made against you knowing that if you respond, even in the most modest fashion, you are told by a Corrupt and Highly Conflicted Judge that you will be PUT IN PRISON, maybe for a long period of time,” he said in a post yesterday. One thing to watch today: Initial jobless claims for the week ending May 4 will be released. [Sign up for the Washington Edition newsletter]( for more from the US capital and watch Balance of Power at 1 and 5 p.m. ET weekdays on Bloomberg Television. Chart of the Day April was the Earth’s 11th consecutive month of [record-breaking heat](, with warmer weather already sweeping across Asia and a hotter-than-usual summer expected in Europe. The EU’s Copernicus Climate Change Service said last month’s temperatures globally were 1.58C (2.8F) above historical averages and marked the hottest April on record. And Finally In his first news conference in about two years, South Korean President Yoon Suk Yeol issued an apology over his wife receiving a luxury handbag under questionable circumstances, citing her “unwise behavior.” The statement highlights his bid to [set a new course]( for his government after a stinging defeat in parliamentary elections. Yoon pledged to improve livelihoods and create a new ministry to boost the country’s birthrate, which is ranked lowest in the world and threatens long-term economic prospects. Yoon and his wife Kim Keon Hee landing in London on Nov. 20, 2023. Photographer: Henry Nicholls/AFP/Getty Images More from Bloomberg - Check out our [Bloomberg Investigates]( film series about untold stories and unraveled mysteries - [Bloomberg Opinion]( for a roundup of our most vital opinions on business, politics, economics, tech and more - [Next Africa](, a twice-weekly newsletter on where the continent stands now — and where it’s headed - [Economics Daily]( for what the changing landscape means for policy makers, investors and you - [Green Daily]( for the latest in climate news, zero-emission tech and green finance - Explore more newsletters at [Bloomberg.com](. Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. Want to sponsor this newsletter? [Get in touch here](. You received this message because you are subscribed to Bloomberg's Balance of Power newsletter. If a friend forwarded you this message, [sign up here]( to get it in your inbox. [Unsubscribe]( [Bloomberg.com]( [Contact Us]( Bloomberg L.P. 731 Lexington Avenue, New York, NY 10022 [Ads Powered By Liveintent]( [Ad Choices](