Brazil’s Newest Crisis Fighter Emerges From an Unlikely Position

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Vice President Michel Temer has become the Brazilian government’s Indispensable Man, its main buffer against the swirling turmoil that threatens to overwhelm President Dilma Rousseff and undermine her economic recovery program.

Temer played that role most recently late last week as he kept the ruling coalition together by refusing to join the leader of Congress’s lower house, Eduardo Cunha, in breaking with the government.

And on Tuesday, he sought to ease the sense of rising tension created by internal dissent, economic recession and corruption probes targeting politicians such as Cunha and former President Luiz Inacio Lula da Silva, dismissing the situation as nothing more than a “crisezinha” -- a small crisis.

Temer is the “key to keep the government from derailing and to avoid congressional action against Rousseff,” Joao Paulo Peixoto, a political science professor at the University of Brasilia, said in a telephone interview.

The stakes couldn’t be higher, either for Brazil or those investing in it. Temer negotiated legislative approval earlier this year of most of Rousseff’s austerity program to forestall a credit downgrade, and now is working to ensure its savings aren’t undone by rebellious lawmakers.

Selloff Spree

After a selloff spree that has seen the real decline 3.6 percent and the main stock index drop 4.2 percent in the last month, what goes on in the office of the 74-year-old lawyer-turned-politician could decide whether Brazilian markets fall further.

“The only person in this country with credibility is Michel Temer, and we can’t weaken him,” Danilo Forte, a deputy leader in the lower house of Temer’s party, the Brazilian Democratic Movement, said by telephone. “We’re at risk of losing our credibility, which is fundamental to recover investment.”

Temer’s once-tranquil office in the annex of the presidential palace has become a revolving door of political leaders, as he promises government appointments to allies and pledges billions of reais for lawmakers’ pet projects.

His pledges are made credible by his role as leader of his party, the largest in Congress, and he has secured approval of the tax increases, cuts to labor benefits and stricter rules for pension payouts proposed by his increasingly unpopular boss to cut the budget deficit and bring inflation under control.

Crucial Role

Last week’s events underscored his crucial role. The surprise announcement by prosecutors on July 16 that they were investigating corruption allegations against Lula, Dilma’s predecessor and mentor, was followed a day later by reports of Cunha’s involvement in the kickback scheme, prompting him to publicly break with the government.

Cunha is a member of Temer’s party, known as the PMDB, and he called for it to leave the ruling coalition.

That didn’t happen. Temer proclaimed his continued support for the government. Senate President Renan Calheiros stopped short of calling for the PMDB to abandon the coalition even as he expressed support for Cunha’s decision to defect. And other party members distanced themselves from Cunha’s stance.

“Michel has -- more than ever -- a predominant role,” Delcidio Amaral, the government’s leader in the Senate and member of the ruling Workers’ Party, known as the PT, said by telephone July 14. “Michel is the best solution at the moment for President Dilma’s administration.”

2018 Election

Rousseff, Temer and their press spokesmen declined to comment for this article.

Temer hasn’t won every battle. While the PMDB helped pass most of the austerity measures presented by Rousseff, some in the party backed legislation that increases public expenditures, such as voting to raise salaries for judiciary workers and increasing pension payments for younger retirees. Temer unsuccessfully opposed both measures, and Rousseff vetoed both.

The vice president’s party has said it will run its own candidate for president in 2018 rather than supporting the PT’s nominee. Temer hasn’t publicly expressed interest in Brazil’s top job.

Temer alluded to this during an appearance in New York on Tuesday. “At some point in the future, the PMDB party may decide to leave the government,” he said, adding that “especially” may be the case in 2018.

Awkward Fact

There is also the awkward fact that if Rousseff is impeached -- a possibility that was raised earlier in the year and has resurfaced as her popularity has plunged to record lows -- Temer could replace her in the Planalto, as the presidential palace is called.

Nonetheless, the degree of trust Rousseff places in Temer is reflected in the fact that he is the first person from outside the PT that she has empowered to lead the administration’s dealings with Congress. And as leader of the PMDB, he may become crucial if impeachment ever comes to a vote in Congress. The PMDB has the largest number of seats in the lower house and Senate, followed by the PT.

If the court responsible for auditing public accounts rules against Rousseff’s administration on allegations it violated Brazil’s fiscal-responsibility law, Congress could decide to start impeachment proceedings.

‘Unwanted’ Crisis

Temer has pushed back against the prospect of impeachment, telling reporters after a cabinet meeting this month that it would ’’open up an unwanted institutional crisis.’’ He said he trusted the leaders of both chambers of Congress to respect democratic institutions and stop an impeachment vote from going forward.

Temer’s own future is somewhat uncertain, because of an electoral court probe of the sources of donations to Rousseff’s and his 2014 re-election campaign. The court could conceivably revoke the vote, which would put both him and his boss out of office.

For now, his role is clear, yet far from simple: advancing the administration’s agenda amid legal challenges, attacks from the opposition and dissent within the ruling coalition.

“It’s a very delicate situation,” the University of Brasilia’s Peixoto said. He described Temer as a needed buffer between Brazil’s colliding political forces -- “the cotton between the crystal.”