Brazil Back To Its Crisis: Rousseff’s Impeachment Trial To Follow Successful Rio Olympics

Paulo Sotero, Brazil Institute Director

Huffington Post – 08/25/2016

In the end, most Brazilians saw the Rio Olympics as a waste of money well worth it for bringing the country a measure of hope and joy — none greater than winning the first gold medal in man’s soccer to complete the nation’s unsurpassed record of achievement in the world’s most popular sport. A victory in man’s volleyball over Italy in the final day added to the celebration of Brazil’s best Olympic performance, with seven gold and a total of nineteen medals. It did not, however, move public opinion about the wisdom of hosting the event.

By a margin of two to one, Brazilians said, quite realistically, that the cost of the Olympics far exceeded its benefits and, by implication, will not contribute to ease the deep recession the country has faced for more than two years. At the same time, a majority believe the Olympics will help improve Brazil’s international image, a welcome psychological shot in the arm at a time of crisis.

“A waste of money that worked out well”

“It was waste of money that worked well”, wrote columnist José Roberto de Toledo, summing up the contradictory feelings Brazilians displayed in a national opinion poll released in the games’ closing day. The nightmares of crime, contamination of athletes and tourists by Zika and polluted waters at the nautical venues never materialized. Nor did the threat of terrorism or the catastrophic scenarios of infrastructure collapse and political protests that preoccupied local and foreign media for months.

Ironically, the worst case of violence reported during the games never took place. It was quite embarrassing only for the four American swimmers who fabricated it after a night of drinking and partying, and to foreign journalists who bought their story and pontificated about Brazilians’ insecurities after they angrily reacted to the swimmers obviously false allegations.

With the games done, the country will now turn its attention to the Olympic -size domestic crisis it needs to confront. The recession has cost the jobs to more than 11 million and exposed the flaws of Brazil’s political system. On August 25th the Senate will resume the impeachment trial of president Dilma Rousseff, who was suspended from office in May after 70 percent of the Congress Chamber of Deputies indicted her of violating the budget and fiscal responsibility laws by making non-authorized expenditures and creating an explosive fiscal deficit of 10 percent of GDP at the root Brazil’s current troubles.

Her opponents say that 59 senators, five more than the needed majority of two thirds required, will vote to remove Rousseff from office, probably on August 31st. This outcome is expected even among leaders of her Workers Party, who have positioned themselves against a Rousseff proposal to call for early elections in the unlikely case she survives the vote. The disgraced leader vowed to appear in person in Senate on August 29th to defend herself against the charges, a gesture that will undermine her argument that the impeachment amounts to a congressional “coup d’état”. The impeachment proceedings enjoy public opinion support and will follow a ritual approved by Brazil’s Supreme Court last December, after weeks of debate. It will be chaired by the country’s Chief Justice.

Herculean task ahead

Vice-president Michel Temer, a former Rousseff ally who has replaced her as acting president after the impeachment vote, has now the Herculean task of fixing the country’s fiscal mess and revive economic growth after he is sworn in as president before Congress in early September. Measures already announced include establishing a ceiling for federal expenditures, that have gone up for the past two decades and exploded to more than 10 percent of GDP in 2015, reforming an unsustainable social security system and aggressively privatizing state assets to reduce public debt. These policies are aimed at gaining confidence from local and foreign investors, essential to revive an economy now in an unprecedented third year of recession. The alternative of doing nothing and watch the economy collapse to new lows is a political suicide. Complicating matters, however, an ongoing federal investigation that uncovered massive corruption two at state oil giants Petrobras will remain as a potential liability to key ministers of the new government and to Temer himself.

In his favor, the president can count on an opposition in disarray and the lack of alternative to the austerity measures the government wants to push forward. Temer has the support of the business community, which sees in him a seasoned politician capable of mobilizing support in Congress to negotiate the difficult compromises necessary to move legislation that will get Brazil out of the economic swamp and back on a path of economic growth. Forecasters from banks see GDP in positive territory next year. The good vibes left by the Olympics may help yield that scenario, by reminding the country of its resilience and capacity to face uphill battles in time of adversity, such as hosting a successfully Olympics in the midst of a major national crisis.

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