Brazil Girds for Protests as Rousseff Faces Impeachment Risk

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As allegations of corruption and incompetence swamp Brazil’s government, and plummeting commodity prices sap its economy, hundreds of thousands of angry citizens are expected to descend on central squares across the country on Sunday, posing a key test for President Dilma Rousseff.

This will be the year’s third mass protest against Rousseff, who is facing growing calls for her impeachment. A strong showing could help support her ouster and deepen a sell-off on financial markets.

Dilma Rousseff

Dilma Rousseff, Brazil's president.

Photographer: Pete Marovich/Bloomberg

The Free Brazil Movement, one of the groups organizing the demonstrations, says rallies are confirmed in 114 cities.

Congress is watching the turnout both to judge the support for impeachment proceedings and to measure the level of discontent in their home districts.

“Representatives in the lower house are paying close attention to the protests on Sunday to see if they have a national impact,” said Leonardo Picciani the leader of the Democratic Movement Party in the lower house, which remains in uneasy alliance with Rousseff’s Workers’ Party.

Picciani’s party, known as the PMDB, has the largest representation in Congress. Speaker Eduardo Cunha declared his personal opposition to the government after he was accused of soliciting and accepting a $5 million bribe, which he denied. While his party has not formally broken from the Workers’ Party, some of its representatives say they’ll vote for impeachment, an aim shared by large segments of the population.

Reconciliation Talks

The past week has actually provided some respite for the government. The Senate, led by PMDB member Renan Calheiros, showed signs it will cooperate, and two events involving social movements drew supporters for Rousseff and her party. Vice President Michel Temer, also of the PMDB, will invite Cunha and Calheiros for a reconciliation meeting next week, according to a government official who asked not to be named when speaking about future plans.

Cunha told Bloomberg News he hasn’t yet been notified of the meeting, but he’s willing to “dialogue with anyone.”

O Globo, the newspaper of the country’s largest media group, often accused of trying to overthrow the government, published an editorial this week criticizing Congress for feeding a political crisis that aggravates the country’s economic crisis. And the widely expected decision by Moody’s Investors Service to downgrade Brazil’s sovereign credit rating was also taken by some as a good sign, since the country was left with a stable outlook.

Legal Infraction

In another development interpreted by some as positive for the government, Brazil’s audit court granted 15 additional days to respond to new irregularities found in Rousseff’s 2014 accounting. Since impeachment requires a legal infraction, not simply low popularity, the audit court’s recommendation, which will be sent to Congress for a final decision, is seen as the most likely basis to begin impeachment proceedings.

Since narrowly winning reelection last October, Rousseff, Brazil’s first female president, has embarked on an austerity program that has cost her political capital. Her popularity has plummeted to 8 percent, a record low, and more than two-thirds of Brazilians support impeachment, according to Datafolha, a polling firm. The economy in 2015 is forecast to post its worst performance in 25 years amid ongoing corruption probes into politicians and executives.

Expensive Measures

Rousseff has reversed herself on some popular but expensive measures such as caps on electricity and gasoline prices. The middle class that doesn’t qualify for subsidies has been hardest hit as power bills rose an average 23 percent, and more than 50 percent in some regions. Higher interest rates are restricting consumer credit, unemployment has hit 6.9 percent and inflation is rising, inching toward 10 percent.

Rousseff won election in 2010 following Luiz Inacio Lula da Silva, the central figure of the Workers’ Party. She rode his popularity for most of her first term until demonstrations in 2013 brought millions to the streets protesting corruption and spending on the World Cup hosted by Brazil last year.

Rousseff recovered enough to win reelection but protests in March and April took aim at her.

Renan Machado, a 29-year-old lawyer from Sao Paulo said Sunday’s rallies will be an opportunity to demonstrate the outrage shared by many Brazilians.

“I’m going to protest to end this wave of corruption because I can’t stand this incompetent government any longer,” Machado said.

Collor’s Impeachment

The date of this week’s protest is no accident -- demonstrations on Aug. 16, 1992 helped lead to impeachment proceedings against Fernando Collor de Mello.

Collor, who resurrected his political career to become a senator, is one of the more than 30 sitting lawmakers under investigation for alleged participation in a kickback scheme that funneled money from contracts with the state oil company, Petroleo Brasileiro SA, to political parties. Most of the politicians under investigation are part of Rousseff’s ruling coalition, and police arrested the former treasurer and a senior official of her party. Prosecutors haven’t presented evidence against Rousseff and she has repeatedly declared her innocence.

Rousseff has stepped up her public appearances this month, defending herself and her plan to remain in office. She said she never considered resigning and asked Brazilians to reject politics that create chaos for political gain.

Miguel Rossetto, her general secretary, said on Thursday that Sunday’s rallies should not be over-interpreted. “There are protests in favor of the government and those that are critical of the government,” he said. “It’s part of the learning process of our democracy.”