• Impeachment Proceedings Stall Economic Agenda in Congress
  • It's Kill or Be Killed in Brazil Politcs: Political Analyst

Brazil’s political crisis is becoming a two-horse race between President Dilma Rousseff and the head of the lower house to see who survives in office longer.

The same man who started impeachment proceedings against Rousseff, Chamber of Deputies President Eduardo Cunha, is struggling to hang on to his own job as he faces an ethics probe into allegations he lied to Congress. Tensions between the two have escalated as the downfall of one may determine the fate of the other.

Eduardo Cunha
Eduardo Cunha
Photographer: Evaristo Sa/AFP/Getty Images

Their rivalry has increased political divisions to such an extent that melee twice broke out between legislators this week. In a sign of how frayed politicians’ nerves are, the agriculture minister threw wine in the face of an opposition senator during a year-end dinner party. Television broadcasts of Rousseff and Cunha trading barbs -- not to mention scenes of their supporters shoving each other in Congress -- has lit up social media with terms such as #Quemcaiprimeiro, or who will fall first in English, trending on Twitter.

The circus-like atmosphere in the capital Brasilia is also paralyzing the legislative process and increasing skepticism that authorities will be able to shore up fiscal accounts and revive growth.

"While Congress is polarized, the tough economic issues the country faces are not being dealt with," said Joao Paulo Peixoto, professor of political science at the University of Brasilia. "These depressing scenes in parliament increase wide-spread frustration, the idea that all politicians are the same and corrupt. That is dangerous."

QuickTake Brazil’s Highs and Lows

Political turmoil is putting the country’s hard-earned investment-grade rating at risk, Moody’s Investors Service cautioned this week. Any downgrade would come on the heels of Standard & Poor’s, which cut Brazil to junk in September after the budget deficit ballooned and the economy entered what’s expected to be the worst recession in 25 years.

Both Cunha and Rousseff could conceivably survive and continue in their current jobs. A Supreme Court decision next week could annul the impeachment process partially or entirely and the lower house ethics committee could absolve Cunha.

Yet mud-slinging and stalemate in Congress won’t end any time soon. "It’s kill or be killed," said Andre Cesar, a political analyst with political consulting firm Hold.

Efforts to shore up fiscal accounts and boost investor confidence hit a standstill after Cunha on Dec. 2 accepted a request to start impeachment proceedings against the president. Congress postponed discussions to approve the 2016 budget and delayed voting on bills the finance ministry says are key to cut spending and raise government tax revenue next year.

Cunha and Rousseff, who have both denied wrongdoing, scored some victories in their defense. A Supreme Court justice on Dec. 8 suspended impeachment proceedings until its plenary could rule on the legality of the process next week. Meanwhile a house ethics committee has repeatedly postponed its decision on whether to open a formal probe into Cunha.

"It remains a close call whether Rousseff survives," political consulting firm Eurasia Group said in a research note on Thursday. Yet the country’s long-term negative outlook has only strengthened as the split between Cunha’s and Rousseff’s parties "will linger even after the impeachment question has been decided," Eurasia said.

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