Brazil Protest Test for Rousseff’s Bid to See Through Austerity

Planned anti-government protests in Brazil are drawing less support in social media than demonstrations in March, as President Dilma Rousseff tries to rebuild support for austerity measures aimed at fixing a stalled economy.

The events page on Facebook that drew most backing for nationwide demonstrations scheduled for Sunday has 90,000 people signed up. That compares with 250,000 prior to the March 15 protests that drew more than 2 million people according to police estimates.

A smaller turnout Sunday would ease pressure on legislators to oppose tax increases and social benefit cuts, the core of the government’s recovery plan. Rousseff’s largest defeats in Congress this year have come from her own ruling coalition as her popularity dropped to a record amid a growing corruption scandal.

“The lower the turnout, the more of a break she will get,” said Ricardo Ribeiro, political analyst at MCM consulting firm in Sao Paulo. “It would help ease public pressure on legislators opposing her measures.”

To defuse the political crisis, Rousseff on Tuesday designated Vice President Michel Temer as her main liaison with Congress. Temer, who also heads her largest coalition partner, replaced a member of Rousseff’s Workers’ Party. In a sign of easing tension, a day later, leaders of the ruling coalition pledged to support policies aiming at reducing the budget deficit.

The real strengthened 2.6 percent to 3.0494 per U.S. dollar on Wednesday, the biggest gain among 16 major currencies tracked by Bloomberg as lawmakers showed support for the government’s economic plan.

‘Consensus’ Emerging

Rousseff said in a March 31 interview that she will do whatever it takes to boost the primary budget surplus target, which excludes interest payments, to 1.2 percent of gross domestic product this year, from a deficit in 2014. State-run oil company Petroleo Brasileiro SA, which was rattled by the largest corruption scandal in history, will present audited results by the end of the month as part of a broader recovery process, she said.

Three days after the March 15 protests, Rousseff presented a series of anti-corruption bills that would require civil servants to have a clean record, allow ill-gotten gains to be confiscated and sold, and make under-the-table campaign donations a crime.

Rousseff’s approval rating plummeted to a record low 13 percent in a March 16-17 Datafolha survey, down from 23 percent in February. The poll showed 62 percent of respondents ranking Rousseff’s government as bad or terrible, the worst since the administration of Fernando Collor, who resigned in 1992 amid corruption allegations.

While Brazil’s problems are far from solved, the outlook looks less grim than a few weeks ago, said Carlos Caicedo, a senior Latin America country risk analyst at London-based IHS consulting firm.

“The prospect of some consensus is emerging and much of the thunder behind the street protests appears to be fading,” Caicedo said.

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