Brazil President’s Fight Against Corruption Angers Government Allies

Brazil's PMDBThe president of Brazil, Dilma Rousseff, reached out to political allies to stem a growing rebellion within her coalition after the resignation of a fourth minister threatened to further tense already strained relations.

Agriculture Minister Wagner Rossi resigned last week following corruption allegations against his aides and at the same time increasing tensions within the twelve-party ruling coalition and adding to a sense of disarray in Rousseff’s eight-month-old government.

The large PMDB party of which Rossi is an influential member, and other coalition allies have been angered by Rousseff’s drive to cut costs, reduce political favors and root out corruption and perks in ministries.

Rossi’s resignation further raised the risk of a damaging showdown between Rousseff and the PMDB, the largest party in her alliance.

Coalition parties blocked voting in Congress last week in a protest against the government and could derail Rousseff’s attempt to control spending and pass reforms such as streamlining the tax code to help raise economic growth.

PMDB is led by vice president Michel Temer, holds a majority in the Senate and has a blocking capacity in the Lower House plus controlling several governorships.

“No government can emerge unscathed from the dismissal of four ministers in eight months. The new ghost haunting (the presidential palace) is named instability,” newspaper Folha de São Paulo wrote in an editorial.

Rossi was replaced by Mendes Ribeiro, a little-known PMDB legislator in the lower house of Congress and a close friend of President Rousseff.

The political crisis in Brasília has yet to upset Brazil’s financial markets, which are more focused on global recession fears, but comes at a bad time as Brazil’s economy shows signs of slowing after record growth last year.

President Rousseff, from the center-left Workers’ Party, faces the tricky task of spurring growth while maintaining fiscal austerity that is crucial to keeping inflation under control.

The 63-year-old career civil servant still enjoys relatively high popular support, in part because many middle-class Brazilians support her drive for cleaner government. But her disapproval rating has doubled since March, signaling that she could lose political capital this year as the weakening economy hits Brazilians in the pocket.

Rousseff inherited a booming economy from Lula, her charismatic and wildly popular predecessor, and came to power on January 1st with bigger majorities in Congress.

Lula’s near-mythical reputation helped get Rousseff elected but he also left her with several hangovers from his eight-year rule, including loose public spending, rising inflation and a corruption-tolerant culture in Brazilian politics.

José Dias, a political consultant in Brasília, said Rousseff had shaken a “wasps’ nest” with the anti-graft drive and appeared to be losing control.

“This corruption sweep is snowballing out of control, it’s extremely dangerous. She’s already lost her legislative agenda, and now she risks growing instability,” he said.

Rousseff’s transport minister left the government under a cloud of graft accusations in July and the high-profile arrest this month of a group of tourism ministry officials including the Deputy Minister on corruption charges has angered PMDB leaders.

Her chief of staff Antonio Palocci, seen by investors as a guiding hand in economic policy, quit in June following allegations of illicit enrichment. Rousseff also lost her defense minister, Nelson Jobim, after he complained that he was surrounded by “idiots.”

Mercopress

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