Divided Lula coalition wins Brazil Congress posts

BRASILIA, Feb 2 (Reuters) President Luiz Inacio Lula da Silva's governing coalition won the leadership in both houses of Brazil's Congress, but is divided and may lack support for constitutional reforms.

Arlindo Chinaglia of Lula's ruling Workers' Party (PT) won the presidency of the Chamber of Deputies with 261 of 512 votes yesterday, making him the third-ranking politician in Brazil.

Chinaglia will help the government set its legislative agenda, which includes overhauling an unwieldy tax regime and a corruption-prone political system, by boosting party discipline.

Lula will also rely on Chinaglia to rally support for an economic stimulus package announced last week.

Economists say Brazil -- Latin America's largest economy -- needs to curtail costly social security and labor costs to help accelerate modest economic growth and catch up to other leading emerging markets such as India and China.

But a fierce campaign battle between Chinaglia and an allied candidate left the governing coalition divided and could signal problems for Lula in rallying support for controversial reforms, many of which require constitutional amendments.

In the Senate, Renan Calheiros of the centrist Brazilian Democratic Movement Party (PMDB) was reelected president of the Senate with 51 of 81 votes. The PMDB is the country's largest party and backed the governing coalition in November.

But the opposition held on to several strategic committees on Thursday, including the one on constitutional matters.

The governing coalition lacks the three-fifths majority in the Senate to amend the Constitution.

The PT did not always back government proposals during Lula's first four-year term, particularly more market-friendly economic policies.

The former union leader began distancing himself from the PT he founded 27 years ago after it was involved in a series of corruption and campaign scandals over the past two years.

Lula, who started his second term on January 1, said early yesterday that he would be ''at ease'' with any of the candidates who won.

Reuters SBA VP0525