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Last Updated: Monday, 13 December, 2004, 04:34 GMT
Political blow for Brazil's Lula
By Steve Kingstone
BBC correspondent in Sao Paulo

Brazilian President Luiz Inacio Lula da Silva
Lula has been criticised for failing to deliver on social policy
Brazil's president has suffered a significant political setback with the withdrawal of two parties from his governing coalition.

The Brazilian Democratic Movement Party has voted to end its two-year alliance with the president's Workers' Party.

The decision, on Sunday, came a day after the Popular Socialist Party also decided to break with the government.

Luiz Inacio Lula da Silva has been left weakened as he tries to push his reform agenda through Brazil's parliament.

Complicated calculation

President Lula could have lived with the desertion of the Popular Socialist Party but losing the much larger Brazilian Democratic Movement Party (PMDB) is much more serious.

It runs more local councils than any other party in Brazil and, in parliament, only Lula's Workers' Party (PT) has more lawmakers.

On Sunday, rank and file PMDB members voted by a large majority to cut links with the government - a move that will mean giving up two cabinet posts.

They also voted to field their own candidate for president in two years' time rather than give their backing to Lula as he seeks re-election.

Their main criticism of the president is that so far he has failed to deliver on social policy.

It is possible that some PMDB lawmakers will choose to leave the party and remain within the governing coalition.

There are also some who say Sunday's vote was illegal under party rules.

But even so, it looks as if Lula has lost an important partner and, with key votes ahead on financial and judicial reform, the arithmetic for the government is suddenly looking a lot more complicated.

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