Brazil Lawmakers Start Impeachment Session in Split Nation

Brazil Markets Rally on Rousseff Impeachment Prospect
  • Sunday vote to help determine future of Rousseff's presidency
  • Top Court rejected government appeal to stop impeachment vote

Brazil’s lower house of Congress started a marathon session that will lead to a crucial impeachment vote on Sunday, following months of intense debate that has left Latin America’s largest nation deeply divided.

The Supreme Court early Friday rejected a government motion trying to stop the session, paving the way for a vote that leading local papers say President Dilma Rousseff will lose. Tallies by O Globo and O Estado de S. Paulo newspapers showed that the opposition had surpassed the 342 votes necessary to move the impeachment process into the Senate. There, only a simple majority is required to remove her temporarily. Two thirds of the senators are needed to force her out of office permanently.

Brazilians are looking to Congress to end a political stalemate that has exacerbated the country’s worst recession in over a century. Financial markets have rallied on the prospect of her more business-friendly Vice President Michel Temer taking over. The benchmark Ibovespa index gained 1.4 percent by midday to trade near nine-month highs.

The Supreme Court in a session lasting into early Friday, rejected government claims the impeachment process was flawed and unfounded. That could undermine the battle cry of Rousseff supporters who claim the opposition is trying to oust her in a coup because it lost by a narrow margin in the 2014 presidential race.

Attorney-General Jose Eduardo Cardozo told the lower house that a vote for impeachment would be an affront to the constitution. Losing support in Congress was sufficient for a president to fall in a parliamentary democracy but not in a presidential system like Brazil’s, he said.

Behind the charges of having masked budget deficits with illegal loans from state banks, opposition parties accuse Rousseff of having run the country’s public finances into the ground.

“It’s not just a mere accounting issue,” Miguel Reale Jr., one of the co-authors of the impeachment request told the deputies. “The coup was when they hid the fact that the country was broke.”

Brazil’s budget deficit more than trebled since 2014 to 11 percent of gross domestic product, the highest on record. Economists surveyed by the central bank now estimate the economy will contract 3.8 percent this year, which would make for Brazil’s deepest recession in over a century.

Tension that had been simmering between Rousseff and Temer since the beginning of their second mandate in January last year, erupted earlier this week when she called her vice president of openly plotting against her.

Anti-impeachment protesters blocked traffic on main roads in Sao Paulo on Friday morning. Anti- and pro-government protesters are expected to stage competing demonstrations in Brazil’s largest cities over the weekend, and particularly on Sunday when the impeachment vote will be televised live.

“This Sunday will be the worst Sunday of my life,” Ze Geraldo, the leader of the ruling Workers’ Party in the lower house, said in a speech calling the impeachment “illegal, immoral, and dirty.”

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