June 25 (Bloomberg) -- President Dilma Rousseff, seeking to meet the demands raised by Brazil’s biggest protests in two decades, called for a plebiscite to bring about political changes aimed at wringing endemic corruption out of Brazil’s institutions.
Rousseff, at a meeting with governors and mayors in Brasilia yesterday, said she would classify corruption as one of the country’s most serious crimes. She also pledged 50 billion reais ($22.5 billion) for urban transport upgrades, one hundred percent of oil royalties to education and the formation of a national public transportation council. Marches are scheduled to continue this week after protests claimed two lives yesterday and shut down several highways today, including one linking Rio de Janeiro and Belo Horizonte.
While demonstrators first railed against an increase in bus fares, protesters have expanded their grievances, from teachers marching for better pay to gay-rights activists opposing a bill to allow medical treatment for homosexuality. Rousseff, who will meet with the chiefs of the Supreme Court, the Senate, and the national bar association today, received leaders of the Free Fare Movement yesterday before meeting with municipal authorities.
“Campaign finance will likely be tackled,” Joao Augusto de Castro Neves, an analyst at political risk company Eurasia Group, said by phone from Washington. “There will be harsher punishment for corrupt politicians, and more transparency and accountability.”
Rousseff, 65, said she supports organizing a plebiscite to ask voters whether they support holding a constitutional assembly to overhaul the nation’s political system, which is blamed for corruption and excessive spending.
“The people are in the streets saying they want changes, they want more citizenship,” Rousseff said at the start of yesterday’s meeting at the presidential palace in Brasilia. “They want quality public services and more effective tools for fighting corruption.”
Supreme Court Justice Marco Aurelio told CBN radio today that a constituent assembly and constitutional amendment weren’t necessary, and that Congress was most appropriate to improve electoral and party rules. Existing proposals along those lines could have been approved quickly in Congress had the governing coalition backed them, Aecio Neves of the main opposition party PSDB, told state news agency Agencia Brasil.
A political overhaul was one of the five accords proposed by Rousseff, with other measures focusing on fiscal responsibility, health care, transportation and public education. Authorities agreed to accelerate 90 billion reais in transportation investments, Brazil’s Cities Minister Aguinaldo Ribeiro told reporters after meeting with the president.
Still, Rousseff called on local authorities to maintain fiscal austerity after inflation this month breached the upper limit of the central bank’s target range of 2.5 percent to 6.5 percent.
“The situation is not easy,” Andre Pereira Cesar, the director of business strategy and public policy company Prospectiva, said by phone. “It’s a short blanket: if you pull it up, it uncovers your feet.”
Two women were killed during a protest yesterday outside Brasilia, bringing the total number of demonstration deaths nationwide to four, according to the federal highway police. New protests also broke out in cities including Rio de Janeiro and Porto Alegre.
Rousseff’s speech represented an early step in addressing public discontent, according to Eurasia Group’s Castro Neves.
“There is space for the debate to grow,” he said. “These protesters target the political class, and she is offering to reform the political class. It is a start.”
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