Rousseff's ouster will not end crisis in Brazil

Inflation is running at 10%, unemployment is at a 7-year high, the economy may contract by 3.8%

To those unfamiliar with the cacophonous tenor of Brazilian politics, the legislative session on Sunday night that approved the impeachment of President Dilma Rousseff could have been mistaken for a soccer match.

As the outcome of the vote became clear, deputies in the lower house of Congress hooted, pumped their fists and hoisted onto their shoulders the man who had cast the pivotal vote. One lawmaker, wearing a flag as a cape, fired off a gun that shot confetti.

The unrestrained merriment was mirrored on the streets of cities across Brazil, where thousands of people celebrated what they hope will be the ouster of Rousseff on charges that she illegally used money from state-owned banks to hide a catastrophic budget deficit and bolster her chances of re-election.

But on Monday, Brazilians awoke to the sobering reality that the political and economic turmoil that has consumed their country – Latin America’s largest – for the past two years is far from over. Inflation is running at 10%, unemployment is at a seven-year high, and the economy is expected to contract by as much as 3.8% for a second year in a row.

A Zika epidemic is coursing through the northeast, and a cash-strapped local government in Rio de Janeiro is racing to prepare the city for the Summer Olympics. If the impeachment process moves forward as many experts predict, Brazilian televisions this August are likely to feature a split-screen spectacle of sporting events and of their president on trial.

“We may be witnessing the end of Dilma but not the end of the Brazilian crisis,” Sylvio Costa, the founder of Congresso em Foco, an anti-corruption watchdog group. “It’s too early to start celebrating.”

And the political paralysis that has hobbled the government is not likely to ease anytime soon. Rousseff will have to step down temporarily next month if the Senate votes by a simple majority to take on her impeachment trial, an outcome that many analysts say is all but assured.

Rousseff, whose résumé includes a stint as a Marxist guerrilla, has vowed to fight on. “Despite much sadness, I have sufficient spirit, strength and courage to confront this injustice,” she said in a televised news conference Monday. “I won’t be taken down.”

The man who is expected to replace her, Vice President Michel Temer, is not exactly a knight in shining armor. Temer, 75, a career politician whose Brazilian Democratic Movement Party has been ensnared in the nation’s ever-expanding corruption scandal, is almost as unpopular as Rousseff.

Writing in the newspaper Folha de S Paulo, the columnist Bernardo Mello Franco took stock of the troubling state of affairs, among them legislative gridlock and at least five leaderless ministries. “In the next weeks, Brazil will be in an exotic predicament,” he wrote on Monday. “Dilma is almost an ex-president and Temer is almost a future president. And because their relationship is broken, the sum of the two cannot give the country one head of government.”

Though a large majority of deputies voted for Rousseff’s impeachment, this nation of 200 million remains deeply divided.

Many of her supporters have promised to take to the streets in an effort to stave off her removal from office.

In recent days, a growing number of officials have been calling for new elections, a process that would require the consent of Congress and the nation’s highest court. “It is clear to the society that the party of Vice President Temer is as responsible for the political, ethical and economic crisis as is the party of President Dilma,” said Marina Silva, a former minister and outspoken critic of Rousseff. The vast majority of Brazilians also have little faith left in their leaders.

A third of the deputies in the lower house have been criminally charged or are being investigated for corruption, including its speaker, Eduardo Cunha, the man who orchestrated Rousseff’s impeachment. Cunha, who faces charges that he accepted $40 million in bribes, is especially disliked.

Senate President Renan Calheiros has his own ethical challenges. He is under investigation for receiving bribes, tax evasion and allowing a lobbyist to pay child support for a daughter of his, born from an extramarital affair.

“We have two thieves leading our Congress and they should both be in prison,” said Costa, the anti-corruption activist.

As he watched the balloting Sunday night on television, Julio Barboza, 33, an environmental scientist from São Paulo, grew despondent as a stream of deputies cited God, clean government and democracy as they cast their votes against the president.

He noted that just a handful used their brief speeches to mention the accusations Rousseff is facing. “It made me realise that the impeachment process has little to do with fiscal crimes,” Barboza said. “Nothing good can come out of this process. There will be a lot of talk, but nothing will change.”

National stability
For the moment, all eyes are on Temer, the vice president, a taciturn man who has long preferred operating behind the scenes. Although he is also the subject of an impeachment petition, most experts believe the matter will be dropped in the interest of national stability.

Despite his dismal popularity on the street, many business leaders believe Temer, a centrist, is the best hope for righting the Brazilian economy. Expectations that Temer would replace Rousseff have had one tangible effect on the nation’s financial outlook: As the impeachment process moved forward in recent months, Brazilian stocks rallied 35%, though they lost two points on Monday.

A former speaker of the lower house and an adroit deal-maker, Temer will need to build a coalition in a fractious Congress to enact the economic reforms, tax increases and painful austerity required to contain a ballooning deficit. “It is a mixture of hope and challenges at the same time,” said Ilan Goldfajn, chief economist at Itau Unibanco.

The road, however, will be steep. Temer’s party enjoys scant public support and members of Rouseff’s Workers Party, angry over his defection to the opposition last month, are likely to stymie his work in Congress. And any effort to pare back social spending and trim bloated public pensions will stir up fierce resistance from labour unions and left-leaning activists.

“The economy is in disarray and most Brazilians are hopeless about the current political class,” said Carlos Eduardo Lins da Silva, a senior consultant at the São Paulo Research Foundation. “Temer is the personification of the old political class, so he will have a big challenge.”