Brazil’s suspended president denounces indictment as a ‘political farce’

Reuters/The Guardian, 07/06/2016

Brazil’s suspended president Dilma Rousseff has told the senate commission considering whether to permanently remove her from office that the case against her is a farce, arguing that her alleged misdeeds were no more than “routine acts of budgetary management”.

In a letter to the commission read by her lawyer on Wednesday, Rousseff also promised to fight to carry out her mandate until the end of 2018.

“Everybody knows that you are judging an honest woman, a public servant dedicated to just causes,” she said. “I’ve honored those who voted for me.”

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A Final Defense of Dilma Rousseff

Brian Winter – Americas Quarterly, 05/11/2016

Back in March 2014, when the Petrobras scandal was just getting started, some of President Dilma Rousseff’s top aides saw a golden opportunity to kill the investigation – or at least badly wound it.

Márcio Anselmo, the Federal Police deputy in charge of the probe, had given an interview (which can be seen here) to Jornal Nacional, Brazil’s most-watched news program. On-camera and on-the-record, Anselmo and others laid out the main points of the case, which would soon become notorious: A former Petrobras board member who had accepted a Land Rover as a bribe, the money launderer whose plea-bargain testimony would prove key, and the sordid connections with some of the country’s biggest construction companies.

Everyone in Brasília knew the stakes were huge. The election was just six months away, and Rousseff was facing a tight race. But some ministers were convinced the TV interview was actually a blessing in disguise. They believed Anselmo had broken a dictatorship-era statute that, they argued, prohibited Federal Police officials from discussing cases in progress with the media. Fire him, they urged Rousseff. Fire him now and attack the investigators for using the media to selectively leak information damaging to the government.

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Dilma Rousseff, facing impeachment in Brazil, has alienated many allies

Andrew Jacobs – The New York Times, 05/01/2016

BRASÍLIA — They were idealists, united in the struggle against Brazil’s military dictators.

As democracy flourished, so did their careers. One of them, Paulo Ziulkoski, became the leader of an association of Brazilian cities. The other, Dilma Rousseff, rose even higher, becoming the president of Latin America’s largest country.

But their friendship soon fell apart. During a contentious meeting with the nation’s mayors in 2012, Ms. Rousseff rejected pleas for a share of Brazil’s soaring oil revenues. After the room erupted in jeers, Mr. Ziulkoski said, she stormed up to him, poked a finger in his face and humiliated him with a string of expletives.

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Brazil: How could so much go so wrong?

Mimi Whitefield – Miami Herald, 11/1/2015

It would be bad enough if Brazil’s embattled president, Dilma Rousseff, just had a recession and a plummeting currency to deal with. But in a perfect storm, she also has two corruption investigations, a fractious Congress and impeachment threats on her plate.

Inflation is running at nearly 10 percent, there is a soaring budget deficit and the value of the real has fallen by 32 percent. Average wages are declining and unemployment in Brazil’s six major metropolitan regions was 7.6 percent in September after years of almost full employment. And the bad news keeps on coming: In the first nine months of this year, 657,761 jobs were lost, and 1.5 million jobs are expected to disappear from Brazil’s formal economy in 2015.

Standard & Poor’s has downgraded Brazil’s credit rating to junk status, and Fitch Ratings downgraded Brazil to BBB-, which places it at just a notch above junk. Corruption investigations into both Petrobras, the state-run oil company, and the construction industry already have damaged investor confidence. Dozens of members of Congress are under investigation and important corporate leaders have been jailed.

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Brazil’s Rousseff cuts eight ministries in cabinet shuffle

Paulo Trevisani – The Wall Street Journal, 10/2/2015

Brazil’s President Dilma Rousseff shook up her cabinet Friday in a bid to save her job and break a political logjam that is paralyzing Latin America’s largest economy.

The changes give more clout to Brazil’s largest political party, the PMDB. Its leaders are seen as key to blocking a possible impeachment process against Ms. Rousseff and helping her pass much-needed fiscal reforms.

The revamp comes as the deeply unpopular president and her ruling Workers’ Party or PT struggle to cling to power less than a year after Ms. Rousseff won a second four-year term in the October 2014 elections.

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Brazil Congress postpones vote on Dilma Rousseff’s vetoes on extra spending

Paulo Trevisani – The Wall Street Journal, 9/30/2015

Markets are bracing for another tense day in Brazil after Congress on Wednesday postponed a vote that analysts say could have kept the country’s shaky finances from getting even worse.

Lawmakers seemed on track to ratify President Dilma Rousseff’s vetoes of spending bills that could add an estimated 127.8 billion Brazilian reais ($32.3 billion) to an already large budget gap. But after a full day of intense political fighting, legislators couldn’t agree on going ahead with the vote, to investors’ chagrin.

“It is terrible news,” economist Monica De Bolle, from a visiting fellow at the Peterson Institute for International Economics in Washington, D.C., said about the delay. “It shows that there is no understanding between the president” and her allies in Congress. “We are looking at another day of turbulence in the markets,” she said.

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Brazil raises taxes on financial firms

Rogerio Jelmayer – The Wall Street Journal, 9/16/2015

Brazil’s Senate approved a tax increase on financial firms’ profits, part of a government effort to boost the country’s revenue and cut its budget deficit amid weak economic growth.

The Senate step follows the approval by the lower house earlier this month, and now must be signed by President Dilma Rousseff before it can be implemented. The so called CSLL tax will rise to 20% from 15%, with the increase expected to take effect Oct. 1.

The increase, which will affect banks, brokerages and other financial institutions, is likely to generate extra revenue for the government worth 900 million Brazilian reais ($233 million) this year; BRL3 billion in the next year; and BRL4 billion in 2017, as the increase will be implemented gradually.

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Crisis in Brazil leads to gridlock with no end in sight

Paulo Sotero – The Huffington Post, 9/8/2015 

(AP Photo/Joedson Alves, File, July 2015)

(AP Photo/Joedson Alves, File, July 2015)

Less than a year after reelecting President Dilma Rousseff, Brazil finds itself gridlocked in a self-inflicted crisis of a complexity without precedent and no resolution in sight. With impeachment looming, Rousseff’s tenure in power is increasingly uncertain. The country, viewed once as an emerging powerhouse in the global scene, is politically paralyzed in the face of a full-fledged recession made worse by a federal investigation and prosecution of a corruption allegation of biblical proportions involving state oil giant Petrobras, leading construction companies, and the main political parties of Rousseff’s government coalition.

A discredited leader, approved now by less than 10% of the voters, the lowest on record, Rousseff has resisted calls to step down. She has also vowed to fight attempts of removing her from office through an impeachment process, which is supported by a significant majority of Brazilians in opinion polls and could gain traction in the coming weeks. On Saturday September 5, the Federal Supreme Tribunal, Brazil’s highest court, authorized the federal prosecutor’s office to move ahead with investigations on campaign finance fraud involving two members of the president’s inner circle, including the minister of media affairs, Edinho Silva, who was treasurer of her 2014 presidential campaign.

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Brazil’s crafty Senate boss helps keep Rousseff afloat

Anthony Boadle – Reuters, 8/30/2015

Renan Calheiros took an Air Force jet to get hair implants and was accused of letting a lobbyist pay child support to a journalist he had an affair and a child with.

Either episode would have derailed many politicians but corruption allegations have not kept Calheiros, the 59-year-old president of Brazil’s Senate, from making himself a go-to partner in the chaotic dance of Brazilian politics.

President Dilma Rousseff, her government beset by economic and corruption crises that some believe could cost her the presidency, is the latest to take his hand.

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Brazil’s stock exchange is nearing a bear market

Paula Sambo and Ney Hayashi Cruz – Bloomberg Business, 8/19/2015

A plunge in the Ibovespa from this year’s peak put the equity gauge on the brink of a bear market amid forecasts Latin America’s largest economy is headed toward the longest recession since the 1930s.

The stock benchmark extended its slump since May 5 to almost 20 percent as lender Itau Unibanco Holding SA and oil producer Petroleo Brasileiro SA tumbled. Traders have been pulling money from Brazil on concern President Dilma Rousseff will struggle to revive the economy, curb inflation and narrow the budget deficit amid a political crisis. The real posted the second-biggest decline among 16 global major currencies.

Investors are turning bearish as the central bank has signaled it will hold interest rates at a nine-year high even in the face of a recession. Rising borrowing costs are slowing down consumer purchases, pushing Rousseff’s approval rating to record lows and dimming prospects for corporate earnings. To make matters worse, emerging markets have joined a selloff in commodities since China’s yuan devaluation last week.

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