Rousseff Hands Allies More Power to Boost Brazil Presidency

  • Coalition partner gains more ministries and bigger budget
  • President cuts her own salary to show commitment to austerity

Brazil’s President Dilma Rousseff has handed her biggest coalition partner greater control of the government as part of a Cabinet shakeup designed to bolster support among allies and fend off threats off impeachment.

Rousseff is giving members of the Brazilian Democratic Movement Party authority over seven ministries, including the Health Ministry that has one of the biggest budgets in Brazil’s government. The party known as the PMDB has spearheaded some of Rousseff’s main political defeats this year amid disagreement over a series of austerity measures. Friday’s move is designed to gain more support from lawmakers.

“We need political stability,” Rousseff said in Brasilia as she announced the Cabinet shuffle. "By changing some of the ministerial directors, we are making our government coalition more balanced, strengthening relations with parties and with legislators who give us political support."

Lower house President Eduardo Cunha, a member of the PMDB who opposes Rousseff, next week is expected to continue reviewing requests from politicians and citizen groups to start impeachment proceedings over charges that include corruption and doctoring fiscal accounts. She denies the allegations.

Also next week, Rousseff’s Cabinet change will face its first test when legislators vote whether to uphold her vetoes of spending bills that she says would inflate the budget deficit. Standard & Poor’s cut Brazil to junk last month, citing an erosion of fiscal accounts.

More Power

The PMDB previously controlled six of the government’s 39 ministries. Rousseff also on Friday eliminated eight ministries, 30 secretariats and 3,000 political appointments. She is trimming her own salary, and those of her vice president and ministers, by 10 percent. Joaquim Levy and Nelson Barbosa are keeping their jobs as finance and budget ministers, respectively. Alexandre Tombini stays as central bank president.

"The number-one goal of this cabinet reform was to appease the PDMB," said Joao Augusto de Castro Neves, Latin America director of political risk consulting firm Eurasia Group. "By giving PMDB more power, you can say she’s delegating more and more. But I wouldn’t go as far to say she’s relinquishing complete power."

The PMDB’s increased clout comes at the expense of Rousseff’s own Workers’ Party, known as the PT. Rousseff will fold secretariats representing social movements dear to her party such as equality and human rights into one ministry. She is demoting her chief of staff, Aloizio Mercadante, to education minister. Jacques Wagner of the PT will replace Mercadante, who struggled to rebuild her support in Congress.

Not everyone agrees the move will be enough to leverage enough support to approve tax increases that the government needs to avoid further credit downgrades. She may still face opposition from factions of the PMDB that didn’t benefit from the ministerial reform, Thiago de Aragao, partner and director of strategy at political-risk consulting company Arko Advice.

“We know that if we make mistakes, we need to fix them” Rousseff said. The cabinet shuffle is designed to “modernize the government’s political base, seeking a majority to improve our ability to govern.”

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