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Lula was inaugurated for his second term as President of Brazil on 1 January, 2007.The second term got off to a slow start, with Lula delaying the announcement of hiscabinet until the end of March, a decision that is customarily announced withinthree to four weeks of the presidential inauguration. PT’s hegemony in Congresswas uneven, complicating the process of assembling the Executive: while forcesallied to Lula controlled more than 60% of Congress, there was much intra-alliancetension to manage among the various political parties. 591During a few months spanning the end of the first term and the start of the second,the President’s foreign affairs adviser, Marco Aurélio Garcia, served concurrently asinterim president of PT, as the party president Jose Genoíno was forced to resignunder a cloud of corruption allegations. By the departure of Genoíno, along withthe earlier resignation of José ‘Zé’ Dirceu, Lula’s Chief of Staff, Lula lost two of hismost loyal generals in the Articulação ‘centrist’ faction of PT. 592 At the same time,however, never in Brazil’s history has the governing party held such proximity toforeign policy as when Garcia held the dual roles of PT President and presidentialforeign affairs adviser.In terms of the growth of national power, the Brazilian economy was poised togrow from the sound base provided by Lula’s first term, which in turn, consolidatedon the foundation left by Cardoso’s economic stabilisation policies. According tothe Economist Intelligence Report in early 2007, economic conditions at this stage werethe most solid than for any other president in recent Brazilian history. 593 Brazil’sinternational reserves by the end of the first year of Lula’s second term, stood atnuclear capabilities for peaceful purposes; an emphasis on Brazil’s indigenous armsmanufacturing and export capability; and, a reconsideration of the relationship betweenthe military and society in light of past interruptions of democracy by the military.591 Economist Intelligence Unit: Brazil Country Report, 2007.592 Articulação has been the dominant faction, or tendençia, in PT since 1995. It isdistinguished by its comparative moderation on economic and ideological issues, as wellas the Party’s approach to elections and electoral alliances. The major tendencies are:Left Articulation, Social Democrats, Socialist Force and Workers. There are other,smaller regional expressions. See Carlos Graieb, “Vai ser preciso segurar”, in Veja online,Edição 1774, 23 October, 2002. Accessed online at:http://veja.abril.com.br/231002/p_038.html on 5 October, 2010.593 Economist Intelligence Unit: Country Report Brazil, March 2007, p14.233