Rousseff Ouster Spells Tension And Opportunity for Successor

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Brazil Lawmakers Vote To Impeach President Dilma Rousseff

Rousseff hugs a supporter after delivering her farewell speech on Aug. 31.

Photographer: Mario Tama/Getty Images
  • With 61 votes against 20, the Senate found Rousseff guilty
  • Michel Temer takes over presidency until end of term in 2018

Dilma Rousseff’s impeachment was widely expected ever since Congress suspended her from office in May. On Wednesday, nearly nine months after the proceedings against her began, that fate became official, when the Senate found her guilty of violating the country’s budget laws.

It was the second impeachment in the 31 years since the country emerged from military dictatorship and one that will pave the way for a fundamental shift in economic policy after 13 years of her party’s leftist rule.

QuickTake Brazil's Highs and Lows

After nearly a year of political turmoil, Brazil can now redouble its efforts to put the economy back on track, a challenge that includes spending caps and pension cuts, President Michel Temer told his cabinet following a swearing-in ceremony in Congress. "The worst is over," he said in a nationally-televised address.

“The impeachment reduces uncertainties, which helps approval of reforms,” Jorge Simino, chief investment officer at Funcesp,  Brazil’s fourth-largest pension fund with 26.2 billion reais ($8.1 billion) in assets. "The market will follow the speed of reforms advancing."

Within 6 hours of the impeachment vote, Temer was on a plane to China, the first of a series of international trips to attract investors and show the world that he is Brazil’s legitimate leader.

For an in-depth look at investment in Brazil, click here
From Guerrilla to Impeachment: the Dilma Rousseff Story

Many legislators celebrated the president’s ouster by singing the national anthem, while residents of the capital set off fireworks. In a televised speech at the presidential palace she now must vacate, Rousseff pledged a tough opposition to the Temer administration and warned that minorities and women would suffer under his conservative rule. If not herself, somebody else would pick up the banner she and her predecessor, Luiz Inacio Lula da Silva, have carried, she promised.

"They sentenced an innocent person and carried out a parliamentary coup," Rousseff said, flanked by supporters. Her defense on Thursday appealed in the Supreme Court against the Senate’s vote. The request will be decided by Justice Teori Zavascki, who could call a Supreme Court session to rule on the appeal.

For a look at the implications of impeachment, click here

Markets initially surged after Rousseff was suspended in May and Temer took over on pledges to rein in government spending and introduce more business-friendly policies. There are signs the economy could be on the way to recovery as consumers and executives gain confidence. Retail sales and industrial output are inching higher and economists forecast a return to growth in the fourth quarter.

Behind the narrow allegations of breaking budget laws, what led a majority of Brazilians to back impeachment was a sense that Rousseff mismanaged the economy and was lenient on rampant corruption.

Growing Opposition

Temer, who is seen by many Brazilians as part of the same political establishment they have come to distrust, must now prove he won’t do the same. Only 14 percent of those polled in a Datafolha opinion survey in July considered the Temer administration good or very good compared with 13 percent for the Rousseff administration in April.

Three of Temer’s ministers have resigned amid allegations of corruption or trying to cover up graft. The Senate chief, a member of Temer’s party, is under investigation for corruption as well. All four deny wrongdoing.

The 75-year-old constitutional lawyer also faces growing opposition within his own rank and file to unpopular austerity measures, such as caps on civil servants’ pay and cuts to pension benefits. Fears of a rift in his coalition were fueled on Wednesday, when senators of his own party angered allies by granting Rousseff the right to hold public office in the future in an apparent contradiction to the Constitution.

Temer’s coalition is at risk if he does not re-establish unity, said the head of the DEM party, one of Temer’s largest allies. If the Temer government insists on "being a snake with two heads" he won’t have enough support to approve necessary economic measures, DEM chief Jose Agripino said, according to Globo News.

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