Brazilian President Dilma Rousseff’s key ally in Congress is certain it can head off an impeachment threat, but in return the party demands a radical change of policy course to pull the economy out of its deepest downturn in 25 years.
Senator Eunicio Oliveira, Senate leader of the fractious Brazilian Democratic Movement Party (PMDB), said Rousseff took a first step in that direction by replacing austerity-minded Finance Minister Joaquim Levy with leftist economist Nelson Barbosa, who is expected to ease up the belt-tightening to spur growth.
Rousseff’s position had improved with Supreme Court rulings last week that gave the upper chamber authority to reject impeachment even if the lower house votes to impeach her.
Brazil’s deep recession and a massive corruption scandal at state-run oil company Petroleo Brasileiro SA have turned Rousseff into the country’s most unpopular president in as many years, and her opponents are seeking to unseat her one year into her second term for allegedly breaking budget laws.
Impeachment proceedings against Rousseff were opened December 2 in the lower house by her archenemy, the speaker Eduardo Cunha, a PMDB leader who has been charged with taking bribes. But on Wednesday, the Supreme Court ruled a secret vote Cunha used to stack an impeachment committee with lawmakers who want Rousseff ousted was invalid and needed to be held again.
The court also gave more power to the Senate to decide whether to hold an impeachment trial during which the president would have to step down.
Rousseff is believed to have a margin of about 20 votes in her favor to be able to block impeachment in the lower house,.
Social pressure cooker
Rousseff’s prospects of political survival got a mild boost over the weekend from a poll that showed her approval rating has improved slightly.
Presidential aides worry, however, that rising inflation and the growing ranks of unemployed Brazilians - economists estimate unemployment could reach 10% next year - will reignite social unrest and fuel the anti-Rousseff movement as a decision on the impeachment process drags on into next year.
The choice of Barbosa, an advocate of spending on housing and other programmes to stimulate the economy, is unlikely to win Rousseff friends on Wall Street.
But the move is a calculated gamble that many in Brazil have lost their stomach for more belt-tightening and want to see growth return now, even at the risk of greater inflation later.
