Ally-Turned-Critic Rejects Rousseff Ouster in Brazilian Scandal

Updated on

President Dilma Rousseff’s largest ally will remain in the governing coalition through the end of her mandate even as ties with the ruling party sour, the head of Brazil’s lower house of Congress said.

Eduardo Cunha, whose PMDB party is key to passing government austerity measures in Congress, said in an interview Friday he was against using impeachment as a type of “recall” to oust an unpopular president who won re-election by a narrow margin last year.

“Impeachment can’t be used as an electoral tool,” he said in Brasilia. “Those who made the wrong choice or regret their vote will have to bide their time.”

Cunha’s message of institutional stability and support for the beleaguered president, whose popularity is at a record low, comes after the ruling coalition and members of his party delayed and watered down Rousseff’s proposals to cut a budget deficit. He will put to a vote a government bill to boost corporate taxes next week, and favors legislation to attract more private capital to the oil and aviation industries.

Rousseff’s shift after winning re-election from stimulating growth to implementing fiscal-austerity measures is partially to blame for the troubles within her Workers’ Party and the coalition, said Cunha, 56. Some members of the alliance and her party have voted against bills that raise taxes and cap labor benefits amid rising unemployment.

‘More Unpopular’

“The Workers’ Party today is more unpopular than the president, and its contradictions are pulling the government down,” he said.

The PMDB party that has helped form governments since Brazil’s return to democracy in 1985 will break its decade-long alliance with the Workers’ Party and make its own bid for the country’s top job in 2018, Cunha said.

Still, an economic recovery following this year’s contraction, which is expected to be the worst in a quarter-century, could provide a boost to the president’s popularity, he said.

Measures he supports that would attract investments include removing restrictions on foreign investment in airlines and stripping state-oil company Petroleo Brasileiro SA of the requirement to take a stake and operate all deepwater oilfields in what’s known as the pre-salt layer.

In spite of all its current difficulties, “Brazil has enormous growth potential, and it’s cheap,” Cunha said about the price of financial assets. “Whoever stays out of Brazil at this time may pay dearly later to come back in.”

Before it's here, it's on the Bloomberg Terminal. LEARN MORE