Brazil President Faces Higher Risk of Impeachment, Eurasia Says

The chances of Brazilian President Dilma Rousseff being impeached has increased as investigations into a corruption scandal at Petrobras further implicate members of her party, Eurasia Group said.

The political-risk consulting firm on Tuesday raised to 30 percent from 20 percent the odds that Rousseff won’t finish her second four-year term, which ends in 2018. The allegations of graft plus expectations the economy will contract this year have driven Rousseff’s approval rating to a record low.

“Speculation over Rousseff’s ouster has meaningfully picked up over the past two weeks,” Christopher Garman, head of country analysis at Eurasia, wrote in a note to clients. “The main opposition party, the PSDB, held its convention over the weekend, during which its leadership repeatedly announced that Rousseff is unlikely to finish her term.”

Impeachment talks resurfaced after Veja magazine reported Ricardo Pessoa, founder of construction company UTC, told the police that Rousseff’s 2014 campaign received illegal donations. Discussions of impeachment also gained momentum after Brazil’s audit court last month questioned the legality of the government’s 2014 financial accounts.

“I won’t go down,” Rousseff said in an interview with Folha de Sao Paulo published Tuesday. She denied any wrongdoing and challenged anyone to prove she received illegal money.

Members of Rousseff’s ruling coalition on Tuesday signed a statement in support of the president and Vice President Michel Temer, dismissing speculation some of her allies back her ouster.

The congressional and party leaders of the ruling coalition “reaffirm their profound respect for the federal constitution and unswerving commitment to the peoples’ will expressed in the ballots,” according to the letter.

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