Posts Tagged ‘Temer’

Brazilians Denounce Their Leader, but Economists Offer Praise

August 16, 2018

Unpopular President Michel Temer, who steps down after October elections, righted a falling economy but didn’t revamp a troubled pension system

Brazilian President Michel Temer
Brazilian President Michel Temer PHOTO: EVARISTO SA/AGENCE FRANCE-PRESSE/GETTY IMAGES
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BRASÍLIA—Brazil’s president, Michel Temer, has been called a coup plotter, charged with corruption and is highly unpopular with voters.

But as Mr. Temer prepares to leave politics after national elections in October, many economists credit him with taming his country’s high inflation, reviving private investment with business-friendly policies and pulling the country out of a steep recession.

There’s still plenty of unfinished business. During his two years in office, he failed to make dents in a huge budget shortfall and national debt load, nor accomplish a key goal—reforming a pension system that eats up nearly half of Brazil’s budget.

“It’s an important issue for the nation,” Mr. Temer told The Wall Street Journal in an interview. “Candidates should be talking more about it.”

Many Brazilians view Mr. Temer with suspicion. The 77-year-old former vice president came to power in 2016 after Congress removed President Dilma Rousseff on charges of mishandling the budget. Many accuse him of orchestrating her ouster, an accusation he denies.

His image was further tarnished in 2017, when as president he appeared to endorse the payment of hush money to a jailed lawmaker in a recording leaked to the press. He denied the ensuing charges of corruption and avoided a trial during his term.

Still, 82% of Brazilians disapprove of his governance, according to a recent Datafolha poll.

“Temer is so bad,” said Djanira da Hora, a 64-year-old retiree who sells homemade sweets on the streets of Brasília, the capital. “There is nobody you can trust in the government.”

Many of those who track Brazil’s economy assess his reign more positively than most ordinary Brazilians.

Mr. Temer’s economic team, led by retired banker Henrique Meirelles, cut red tape, reined in spending and took steps to boost business confidence and spark new investing after it had plummeted under Ms. Rousseff, many economists say.

Many of the changes were opposed by unions and the powerful leftist Workers’ Party of Ms. Rousseff and her predecessor, Luiz Inacio Lula da Silva. But they helped set the stage for the first economic growth in 24 months. The economy is projected to grow 1.5% this year.

“Temer made policy changes that stopped the bleeding caused by the recession,” said economist Monica de Bolle of the Peterson Institute, a Washington think tank. “It helped the economy muddle through the crisis.”

The team cut inflation from 9% when Mr. Temer took office to 3% last year, the lowest since 1998, helping to alleviate the strain on household budgets. In a country beset by budget overruns and high public debt, his administration won constitutional approval limiting government spending for the first time.

Mr. Temer also cobbled together the legislative backing to loosen labor law restrictions, leading to a 25% drop in job-related lawsuits. His administration opened up a moribund oil sector to foreign investment, auctioning deep-water oil fields that won the government a nearly $2 billion signing bonus.

Under his watch, Brazil’s central bank trimmed its main interest rate to a 6.5% historic low from 14.25% two years ago.

“Given the circumstances and the state of public finances there were some solid advances,” said Geert Aalbers, a senior analyst at Control Risks, a global risk consultancy.

Obscure for most of his career, Mr. Temer in 2105 made a series of business-friendly proposals as vice president that ran squarely against his boss’s program. Congress removed President Rousseff from power a year later and installed Mr. Temer.

Then in 2017, a prominent industrialist secretly taped Mr. Temer appearing to endorse the hush money, prompting the attorney general to press corruption and money laundering charges against him. The president lobbied Congress to shelve the proceedings.

But the scandal consumed Brazil much of last year, contributing to Mr. Temer’s failure to overhaul the pension system amid a lack of political support.

In the interview, Mr. Temer denied wrongdoing and called the accusations part of “a plot meticulously organized to derail pension reform.” He has offered no evidence of his assertions.

“I want to be remembered as a reformist,” Mr. Temer said. “I don’t want to leave with the stigma of immorality on my shoulders.”

The challenges for Brazil remain sizable: The government struggles to tame a gaping budget shortfall equal to 7% of gross domestic product and a debt load equivalent to 77% of output.

“Looking at the brief Temer administration, what it really tried to do was to fix the fiscal problem,” said UBS economist Tony Volpon. But the “fiscal situation is extremely bad” and the next leader “will have to keep making adjustments to avoid total disaster.”

Most economists, and Mr. Temer himself, agree that the new president must address a pension system that permits some government workers to retire in their 40s with a full salary for life.

The electoral landscape is still fluid, with the most popular choice, Mr. da Silva, barred from running, and other candidates distancing themselves from Mr. Temer.

Mr. Temer, who will leave office when his successor arrives on Jan. 1., expects to face corruption charges he says are likely to be revived when he’s a private citizen. He is also writing a book.

“It will be fiction but based on real-life characters” from his years in power, he said. “I already have them all in my mind.”

Write to Paulo Trevisani at paulo.trevisani@wsj.com

https://www.wsj.com/articles/brazilians-denounce-their-leader-but-economists-offer-praise-1534411800

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Emerging markets await US and European Central Bank meetings

June 10, 2018

No respite seen for fragile EM countries from tighter Federal Reserve policy

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© FT montage; Getty; Bloomberg

Kate Allen, Roger Blitz and Michael Mackenzie

Central banks step into the limelight for investors this week, as European and US officials hold high-profile meetings, in what could prove a crucial moment for policymakers and particularly for emerging markets.

No respite for emerging markets from a strong dollar

Emerging markets are feeling the heat. Brazil has replaced Turkey in the pecking order of EM currencies under assault, as rising political uncertainty has pushed the real towards R$4 against the dollar, its lowest level in two years.

In recent weeks the likes of India, Indonesia, Turkey, Pakistan and the Philippines have raised their official interest rates. All told, EM countries have tightened policy 22 times in 2018 as the US dollar has gained altitude against the backdrop of the US Federal Reserve steadily retreating from easy money.

EM will find little respite from the developed market. “Despite concerns that individual EM stories are coalescing into a broader EM problem, at this stage DM central banks are unlikely to respond, with both the Fed and ECB taking further steps towards tightening/ending easing next week,” says Elsa Lignos at RBC Capital Markets. “That leaves EM central banks as the main line of defence.”

A surging dollar casts a hefty shadow over EM countries, which have been on a borrowing binge and have debt denominated in the reserve currency. A common feature of EM countries coming under the cosh are those with large current account deficits, such as Brazil, India, Indonesia, Turkey and South Africa.

JPMorgan’s EM currency index has fallen 9 per cent from its mid-February peak and loiters near the lows seen in late 2016 The worry is that this trend has room to run.

A shrinking Fed balance sheet and US money market rates near 2 per cent mean investors can be far more discerning after a prolonged period of hunting for yield, notably in EM and risky areas of credit.

The story of recent months is that money is leaving previously hot and richly priced areas of the risk spectrum and heading for safer assets such as US money market funds. These have just seen the biggest weekly inflow since 2013 when the taper tantrum resonated. EM equity and bond Funds are seeing their longest redemption streaks since the fourth quarter of 2016, says EPFR.

Some, such as Urjit Patel, the governor of India’s central bank, argue that the Fed’s balance sheet unwind, at a time of rising Treasury debt sales to fund the Trump administration’s tax cuts, is fuelling a dollar liquidity squeeze.

But EM investors hoping for the Federal Open Market Committee to cut them some slack likely face a long wait.

Other issues, such as political risk in Italy and rising trade tension, have caused market volatility and have been raised by some Fed members. But while Fed chair Jay Powell may mention these risks during his press conference on Wednesday, they are unlikely to amount to more than passing reference.

Ian Lyngen, strategists at BMO Capital Markets, notes global financial conditions have yet to hit past levels that “indicate a crisis’’ and “until that happens, or unless the Fed believes it is losing control of the pace at which markets tighten, we’re more likely to see the FOMC hold steady on its course towards higher rates’’.

Will the ECB signal an end to bond-buying?

After 43 months of bond purchases totalling €2.4tn, is the eurozone economy strong enough for its largest-ever programme of monetary stimulus to come to an end?

That is the question on the table this week as European Central Bank policymakers travel to Riga for their latest policy meeting on Thursday.

Almost six years after Mario Draghi, its president, promised the central bank would do “whatever it takes” to stabilise the bloc, the central bank is considering a return to more normal financial conditions.

Unlike other central banks around the world, the ECB has purchased corporate debt as well as government bonds, and lowered interest rates to negative levels.

The bond buying has put 22 per cent of eurozone governments’ debt on the ECB’s books, according to FT calculations, with low-debt countries such as Germany seeing more than 29 per cent of their outstanding securities purchased while the ECB owns 17 per cent of the paper of Italy, which is more heavily indebted.

And since it began buying investment grade corporate bonds in June 2016, the ECB has built up holdings of €157bn in corporate bonds — nearly 20 per cent of the company paper that is eligible to be bought.

The large-scale purchasing scheme has had a profound effect on bond yields. Spreads of companies whose debt does not qualify for purchase have trended downwards by nearly as much as those which are eligible, research by Deutsche Bank suggests.

With the programme scheduled to wind down in September, trading desks are bracing themselves for the loss of a major buyer of corporate paper.

“It does mean the market is being removed of a crutch which it has leaned on for a very long time,” said Frazer Ross, head of investment grade corporate syndicate at Deutsche Bank. He added that “in an environment where the market’s more volatile . . . the impact of the reduction is magnified”.

The wind-down is more or less inevitable, said a person who works on a debt capital markets desk in London, who added that they believed it would impact prices: “You’ve got an 800 pound gorilla that’s going to turn into the size of a flea . . . unless there’s Lehman part Two, they’re going to stop buying bonds.” Kate Allen and Chloe Cornish

https://www.ft.com/content/94e224e8-6a3b-11e8-b6eb-4acfcfb08c11

Brazil Reaches New Deal to End Truck Drivers’ Strike Seven-day strike left most gas stations in the country without fuel

May 28, 2018

Seven-day strike left most gas stations in the country without fuel

Truckers strike at Regis Bittencourt Highway in Embu, Brazil, on Sunday.
Truckers strike at Regis Bittencourt Highway in Embu, Brazil, on Sunday. PHOTO: MAURÍCIO RUMMENS/ZUMA PRESS

SÃO PAULO—The Brazilian government reached a new agreement with truck drivers on Sunday to end a seven-day strike that left many businesses without vital supplies and most gas stations in the country without fuel.

The government has agreed to a discount in diesel prices that will be in place for 60 days and to sign a bill that will allow truckers not to pay toll on rear axles when not in use, among other concessions, Brazilian President Michel Temer said during a televised speech Sunday night.

This is the second agreement announced by the government in an attempt to end the strike. Last week, the government said several truckers’ unions had agreed to suspend the strike, but one of the biggest groups representing drivers, the Brazilian Association of Truckers (Abcam), rejected the deal.

Brazilian truck drivers began the stoppage on May 21, asking the government to cut taxes on diesel fuel after a recent spike in prices.

The government brought in the military to help clear the roads on Friday, but many truckers remained off the job, threatening an already weak economy.

Over the weekend, local media reported that armed forces were escorting fuel trucks to supply some essential services. But several Brazilian airports are without fuel and supermarkets are reporting shortage of some fresh products, while farmers say millions of animals may die in the coming days due to lack of feed.

Write to Luciana Magalhães at Luciana.Magalhaes@wsj.com

https://www.wsj.com/articles/brazil-reaches-new-deal-to-end-truck-drivers-strike-1527473754

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Brazil cuts fuel prices after strike leaves food, fuel scarce

May 28, 2018

 

Brazil’s President Michel Temer, under pressure from a week-long national truckers’ strike which led to fuel and food shortages, ceded to protesters’ demands Sunday and slashed the cost of diesel.

The cut, equal to 0.46 reais a liter, was to be locked in place for 60 days, the president said in televised remarks, as the strike paralyzes much of the country’s economic infrastructure.

Temer also agreed to four other demands truckers made.

© AFP / by Louis GENOT | Members of the Brazilian Military Police and Sao Paulo’s traffic police stand beside a truck with a windscreen reading “military intervention,” during an operation to clear a road blocked by striking truckers

His decision came after Sergio Etchegoyen, the Minister of Institutional Security, said the country was “on a path to normalization” although he added: “It’s not quick.”

Authorities deployed the military to clear barricades erected by strikers and have been escorting fuel trucks since Friday to maintain access to refineries.

But federal transportation police reported that as of Saturday night, nearly 600 roads were at least partially blocked throughout the sprawling South American country.

Gas stations were virtually out of fuel, and perishable foods were disappearing from store shelves.

Now, Temer said: “we have done our part to ease the problems and suffering,” mentioning that he heard reports that millions of animals could die of hunger if the crisis did not ease.

The average price of diesel was 3.36 reais (92 US cents) in January and rose to 3.6 before the strike, according to news portal G1. On May 26, it hit 3.8.

Brazil is a member of the G20 group of the world’s largest emerging and advanced economies, but the first five days of the strike were estimated to have cost the country’s economy $2.8 billion, according to the daily Folha de Sao Paulo.

The truckers put a stranglehold on movement of goods in Brazil to protest increases in fuel prices.

Prices have risen under a politically sensitive decision made in late 2016 to allow the state-run Petrobras oil giant autonomy to set its pricing.

The rise in world oil prices in recent weeks has also been a factor.

The truckers’ determination has been a heavy blow to Temer’s center-right government, five months ahead of the presidential election.

Trucks move 60 percent of the goods that are transported in Brazil, and a protracted strike could cause havoc as it emerges from a 2015-16 recession.

Priority is being given to airports, power plants, and the supply of medical facilities, where the system for transferring organs for transplant was paralyzed by the strike.

In Rio, the city’s articulated bus system was partially disrupted because of a lack of fuel.

Bus lines in other states were also forced to shut on Saturday.

Service was restored after fuel trucks arrived, but buses were operating at 20 percent capacity on Sunday.

In most big Brazilian cities, only emergency bus service functioned on Sunday, to save fuel for the start of the work week on Monday, when state universities have announced they will be closed.

The truckers have pressed on with the strike despite an agreement announced by the government with union representatives late Thursday to call a 15-day suspension.

At that time the government pledged to abolish at least one tax on diesel and implement subsidies to maintain a temporary 10 percent fuel price reduction announced Wednesday by state oil company Petrobras.

by Louis GENOT
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AFP

Without Lula, right wing and green candidates lead Brazil’s presidential race — Front-runner charged with racism

April 15, 2018

Image result for Jair Bolsonaro, photos, selfie

Brazilian Lawmaker Jair Bolsonaro loves the selfie.

SAO PAULO — One of the front-runners in Brazil’s presidential campaign was charged with racism on Friday by the country’s top prosecutor.

Attorney General Raquel Dodge charged conservative deputy Jair Bolsonaro for statements comparing members of rural settlements founded by the descendants of slaves to animals. Members of the settlements are called “quilombolas” in Brazil.

Dodge said Bolsonaro promotes hate speech by attacking blacks, women, foreigners, native Brazilians and homosexuals, dealing a major blow to a politician polling second ahead of October’s presidential elections. Jailed former President Luiz Inacio Lula da Silva currently leads the preferences, but could be barred from running by Brazil’s electoral authorities.

“This unacceptable statement on quilombolas is aligned with the regime of slavery in which blacks were treated as merchandise and with the idea of inequality between human beings,” Dodge said. “After that, the accused said quilombolas don’t do anything and are unfit even to breed, deprecating them emphatically and absolutely for who they are.”

At the time of the remarks, the conservative lawmaker denied he was a racist, but acknowledged being a homophobe.

Brazilian politicians have a special jurisdiction in the country’s top court, which will later decide whether Bolsonaro will have to stand trial.

If convicted, Bolsonaro could be jailed for up to three years. Dodge also wants him to pay about $120,000 in collective damages.

A Datafolha poll published in the end of January showed Bolsonaro leading in Brazil’s presidential race if da Silva is not allowed to run.

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Reuters

SAO PAULO (Reuters) – Environmentalist Marina Silva and right wing politician Jair Bolsonaro would be leading candidates in Brazil’s presidential election if jailed former President Luiz Inácio Lula da Silva is unable to run, according to an opinion poll on Sunday.

Image result for Marina Silva, brazil, photos

Marina Silva

The poll from Datafolha, the first since Lula started last week serving a 12-year sentence following a corruption conviction, showed the former president would lead the race in the unlikely event he was allowed to contest the election, due in October.

In the event he is unable to run, the poll, which ran several scenarios around candidate composition, showed Bolsonaro had 17 percent of voting intentions to Marina’s 15 percent. Datafolha said the poll’s 2 percentage point margin of error effectively means both candidates would be in a tied position as frontrunners.

Under the same scenario without Lula, leftist Ciro Gomes and former Supreme Court justice Joaquim Barbosa, a recent addition to Brazil’s Socialist Party PSB, would tie in third place with 9 percent each.

The poll also ran separate simulations that excluded Lula from the ballot and placing current President Michel Temer and former Finance Minister Henrique Meirelles as the candidate for the ruling coalition. Both Temer and Meirelles attracted only one or two percent in the respective scenarios.

Luiz Inácio Lula da Silva, the former president of Brazil, greeted supporters in front of the Metal Workers Union headquarters on Saturday in São Bernardo do Campo, Brazil. CreditLalo de Almeida for The New York Times

Lula is unlikely to be a candidate as Brazilian legislation bars a person who has been found guilty after an appeal from running for any public position.

In the simulations with Lula still on the ballot, the former president had 30 percent of voting intentions. In simulations in which he is excluded, the poll found that his possible substitute, former Sao Paulo mayor Fernando Haddad, would win only two percent of votes.

Brazil will hold general elections in October to choose a President, governors for 26 states and the federal district and members for both houses of Congress.

Candidates are barred from using donations from corporations, following a massive corruption scandal that sent several politicians and businessman to jail.

Reporting by Marcelo Teixeira; Editing by Sam Holmes

Lula’s conviction leaves Brazil’s presidential race wide open.

Brazil’s unemployment rises to 12.6 percent

March 29, 2018

AFP

© AFP/File | Unemployed people read announcements of job offers in downtown Sao Paulo — the jobless rate in Brazil has now hit 12.6 percent

RIO DE JANEIRO (AFP) – Brazil’s jobless rate rose in the quarter through February, hitting a higher than expected 12.6 percent, the government statistics office said Thursday.The 0.4 percentage point increase on the previous quarter was the second consecutive rise. Analysts polled by the financial newspaper Valor had expected unemployment to reach 12.5 percent.

The December to February period saw 13.1 million people out of work, compared to 12.7 million in November through January.

The nudging up of joblessness follows what had been nine consecutive falls in the index, reflecting what center-right President Michel Temer says is Brazil’s steady exit from its deepest recession in history.

Thursday’s news could hurt Temer, who has toyed with running in October presidential elections, although he is already Brazil’s most unpopular leader on record, with approval ratings in the single digits.

However, compared year on year, Brazil’s jobs market is improving. During the same quarter a year ago, there were 426,000 more people unemployed.

Brazil to maintain control over Embraer: Temer

December 22, 2017

AFP

© AFP | Brazil’s President Michel Temer said the government would not relinquish control over the aircraft manufacturer Embraer

BRASÍLIA (AFP) – Brazilian President Michel Temer on Friday ruled out relinquishing government control over aircraft manufacturer Embraer but said partnership talks with Boeing were welcome.”We welcome an injection of foreign capital. What we are not considering is a question of transferring” control, Temer said in Brasilia. The government holds a so-called golden share in Embraer, the world’s third biggest airplane builder.

Embraer and the US aerospace giant announced Thursday that merger talks were underway, triggering an immediate sharp rise in the Brazilian company’s share price.

A merger between the two companies would build on their existing alliance on the KC-39 military plane and would permit the much-bigger Boeing to fill a gap in its fleet with regional single-aisle planes.

A transaction also would rebut an alliance between Boeing archrival Airbus and Canada’s Bombardier to build smaller planes.

However the political sensitivity over Embraer’s ownership and immediate opposition from the unions means that Boeing is more likely to seek something less than a full takeover, such as a joint venture.

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Brazil’s President Temer to face congressional vote on whether he should stand trial — “He knows how to use the machine and to find the necessary support.”

October 23, 2017

AFP

© AFP/File / by Louis GENOT | The first president in the country to face criminal charges while in office, Michel Temer is accused of obstruction of justice and racketeering

BRASÍLIA (AFP) – He may be Brazil’s most unpopular president in decades and charged with serious crimes, but Michel Temer, the ultimate teflon leader, is expected to breeze through a congressional vote on whether he should stand trial.In Portuguese, Temer means “to be afraid,” but the canny 77-year-old veteran of Brasilia’s notoriously corrupt political scene appears to be full of confidence ahead of Wednesday’s vote.

The first president in the country to face criminal charges while in office, Temer is accused of obstruction of justice and racketeering. He denies any wrongdoing and has argued that the country needs him at the helm to bring in market-friendly reforms after two years of deep recession.

A two-thirds majority is required in the lower house of Congress to have his case sent to the Supreme Court. Just as occurred in August when Congress threw out another charge, his allies are expected to reject the idea.

Constitutional law professor Daniel Vargas is not surprised.

“Temer is a professional in politics. He knows how to use the machine and to find the necessary support,” Vargas said.

Ironically, what makes it easier for Temer is that many of those judging him in the lower house — 185 of the 513 deputies — are themselves targets of anti-corruption probes.

The mentality among those scandal-plagued politicians is clear, Vargas said.

“Temer represents the survival of the old guard,” the analyst added.

“If he falls, who’ll be next?”

Critics say the president is also boosting his chances of survival through blatant vote buying, opening up the budgetary purse to give congress members the projects back in their home states that will help their own causes.

“Despite the damage already suffered by this government, deputies looking for favors can benefit from it,” said Antonio Queiroz, an analyst with DIAP, a congressional watchdog representing trades unions.

– Risky business –

There’s risk for deputies who decide to shore up Temer.

He has record low ratings, with only three percent considering his government “good” or “very good,” according to the latest opinion poll in September.

General elections are scheduled for October 2018 and the mood, analysts say, is already deeply anti-establishment.

However, for Temer, the situation is different, since he is not going to run in the election.

After taking over the presidency in controversial circumstances following impeachment of his leftist predecessor Dilma Rousseff last year, he has never had any illusions about his popularity.

The center-right leader from the PMDB party says that he’s there to take the difficult decisions needed to bring discipline and growth back to Latin America’s biggest, but floundering economy.

“Temer simply doesn’t care what the population thinks about him,” Vargas said.

At the same time, the opposition is fragmented and ordinary Brazilians seem too exhausted to bother repeating the huge demonstrations that were common against Rousseff.

“Without pressure from the streets (and) in the absence of a real opposition alternative, the Congress will not go against Temer,” Vargas said.

The reforms have also endeared Temer to the markets and politically powerful lobbies, like the agricultural industry bloc which counts some 200 deputies in the lower chamber.

“Without the support of the markets, Temer would fall in a week,” Queiroz said. “He’s become their tool.”

by Louis GENOT

Accused of corruption, Temer is still Brazil’s president with approval ratings near zero…

October 19, 2017

Michel Temer may escape impeachment, but the ongoing political crisis undermines democracy and opens the door to authoritarian hardliners

Brazilian President Michel Temer attends a celebration of small enterprise at Planalto Palace in Brasilia on 4 October, 2017. He faces charges of corruption, racketeering and obstruction of justice.
 President Michel Temer attends a celebration of small business at Planalto Palace in Brasília earlier this month. He faces charges of corruption, racketeering and obstruction of justice. Photograph: Evaristo Sa/AFP/Getty Images

If Brazil’s recent decline could be plotted in the falling popularity of its presidents, Michel Temer represents the bottom of the curve.

In 2010, Luiz Inácio Lula da Silva ended his second term with an 80% approval rating. In March 2016 – four months before she was impeached – his protege and successor Dilma Rousseff’s administration had a 10% rating.

Last month, the government of Temer, Rousseff’s former vice-president, plunged to 3% in one poll. Among under 24-year-olds, Temer’s approval hit zero.

Temer has been charged with corruption, racketeering and obstruction of justice. Yet there have been none of the huge, anti-corruption street protests that helped drive Rousseff’s impeachment on charges of breaking budget rules.

And unlike Rousseff, Temer has retained the support of financial markets who like the austerity measures he has introduced, such as privatising government services, a 20-year cap on expenditure and a planned pensions overhaul.

There are signs of economic recovery. But spending has been so pared to the bone that some basic functions of the state are now at risk.

Critics say Temer’s austerity drive hurts the poor more than the rich. According to a survey by Oxfam Brasil, richer Brazilians pay proportionally less tax than the poor and middle classes and the richest 5% earn the same as the rest of the population put together. Yet the highest rate of income tax is just 27.5% .

Markets don’t care much about inequality, but the damaging graft allegations against the president and his allies also threaten to inflict further damage on the country’s institutions.

Temer seems likely to survive this latest crisis – he is expected to win a second vote in the lower house of congress this week on whether to suspend him for a trial – but trust in Brazil’s political leaders has been drastically undermined.

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That lack of trust is feeding support for an authoritarian solution to the crisis – which could have serious consequences in next year’s presidential elections.

The lower house of congress first voted not to suspend the president for a trial after Temer was charged with corruption, shortly after his government agreed to spend $1.33bn on projects in the states of lawmakers who were due to vote, according to independent watchdog Open Accounts.

Many of those lawmakers are allied with powerful agribusiness and evangelical Christian lobbies, and face their own graft investigations. Environmentalists say Temer’s administration is reducing Amazon protection in return for their support.

“Our country has been kidnapped by a band of unscrupulous politicians,” former supreme court justice Joaquim Barbosa said afterwards.

Temer has since been charged with obstruction of justice; along with six leading figures from his party, the Brazilian Democratic Movement Party, or PMDB, he was charged with racketeering.

Janot has also filed charges against Lula, Rousseff and leading members of their Workers’ party – former allies of Temer’s PMDB – and said both parties were part of a criminal organisation that for 15 years had accepted bribes for decisions relating to ports, airports, droughts, oil rigs, tax breaks and hydroelectric plants in the Amazon.

Former prosecutor general Rodrigo Janot – who unveiled the charges against the three former presidents – said Temer’s party abandoned Rousseff’s governing coalition because it had failed to stop the graft investigation, which in turn led to the lower house of congress approving impeachment proceedings.

“All the members of his criminal organisation, independent of the nucleus they belonged to, had a common interest that united them,” Janot wrote. “The maximum, undue economic advantage for themselves and the others, independent of whether such business attended the public interest or not.”

All of the accused have denied the accusations. Temer has said he is the victim of a conspiracy.

As supreme court justice Luís Barroso told foreign journalists recently in Rio, formidable interests are protecting themselves.

“These people are powerful, they have allies, partners and accomplices everywhere, at the highest echelons, in the powers of the Republic, in the press and where one would least imagine,” he said.

But 78% of Brazilians support the graft investigation. And their disillusionment over the way it is playing out at the highest levels opens a dangerous gap for populists and extremists in next year’s presidential elections.

Lula is seeking a return to the presidency in 2018 – and currently leads polling, but he has been handed nearly a sentence of nearly 10 years in prison for corruption and money laundering, and may well be ruled ineligible to stand.

A likely rightwing candidate is João Doria, the flamboyant, multimillionaire mayor of São Paulo. Like Donald Trump, he is a former host of Brazil’s version of the TV show The Apprentice, only assumed power last January, and has no prior administrative experience.

Read the rest:

https://www.theguardian.com/world/2017/oct/17/accused-of-graft-popularity-near-zero-so-why-is-brazils-president-still-in-office

Corruption-plagued Brazil gets new chief prosecutor

September 18, 2017

AFP

© AFP/File | Raquel Dodge, seen here at commission hearings in July, vowed to defend democracy as Brazil’s new chief prosecutor

BRASÍLIA (AFP) – A new chief prosecutor took over Monday in Brazil to oversee an avalanche of corruption investigations, including against President Michel Temer, and promised that no one would be “above the law.”Raquel Dodge replaced the hard hitting Rodrigo Janot who last week rounded off his dramatic term in office by charging Temer with racketeering and obstruction of justice.

Dodge, 56, was nominated by Temer and some analysts see the changeover as heralding a slowdown of Brazil’s huge “Car Wash” anti-graft operation. Temer has railed repeatedly against what he calls an out of control judiciary, a theme echoed by many in Congress who also have been accused of corruption.

At her swearing in ceremony in Brasilia, attended by Temer, Dodge vowed to “defend democracy” and said that her office would make sure that “no one is above the law and that no one is below the law.”

But indicating at the very least a less abrasive approach than Janot, she stressed the need for “harmony” between the different branches of government “as a requirement for the stability of the nation.”

She barely mentioned her predecessor and never referred specifically to “Car Wash.”

One of Dodge’s first big tasks as prosecutor general will be to oversee the latest charges brought against Temer by Janot last Thursday. The charges will soon be sent to the lower house of Congress for debate and, if approved, sent back to the Supreme Court which would open a trial, resulting in Temer’s suspension for 180 days.

A first criminal charge of bribe-taking filed by Janot in June was handily rejected by Temer’s allies in Congress. And analysts agree overwhelmingly that legislators will likewise toss out the latest charges.

Beyond the Temer charges, Dodge inherits the enormous case load of Janot’s probes and prosecutions targeting scores of other politicians and executives.

About a third of Temer’s cabinet is under investigation. Another high profile target is former president Luiz Inacio Lula da Silva, who has been convicted of taking bribes and faces five more graft trials.

The switch in head prosecutor also comes at a crucial time in domestic politics.

Temer is attempting to steer through far-reaching pension reform to strip back what his government says is an unsustainably generous system. While he has strong market support for this and other austerity reforms aimed at ending Brazil’s economic slump, the measures are unpopular and the president has been forced to spend much of his political capital to shore up support against the corruption charges.

However, Temer is now seen as stronger than he has been for months and Janot’s departure will boost his position further.

Although the scandals have been severely embarrassing, leading politicians are seen as unwilling to rock the boat by sending Temer to trial ahead of presidential elections in October of next year. Temer, who is deeply unpopular, is not expected to seek a new term.