Brazil grapples with post-impeachment scenarios

OREANDA-NEWS. April 13, 2016. Brazilian president Dilma Rousseff's fight to block impeachment was dealt another blow last night when a congressional committee approved a report supporting her ouster, increasing the odds that business-oriented vice president Michel Temer would assume power as early as next week. But even his prospects are unclear.

The economic turnaround that stagnant industries such as oil and construction are hoping a Temer presidency will spark is still far out of reach as the country teeters on a political knife edge. Scenarios abound.

Rousseff appears unlikely to finish her second four-year term that began in January 2015, but the near-term prospects for Brazil following her exit remain nebulous. Last night?s tense 38-27 vote in the 65-member committee will be followed by a 17 April vote on the impeachment request in the full 513-member lower house, with debate to begin on 15 April. Rousseff must secure one-third of the vote to survive the proceedings.

If the vote passes in the lower house, Temer assumes as interim president while the senate deliberates for up to 180 days. If the senate approves the request, Temer officially takes over.

The outcome of the impeachment vote is too close to call, with both sides claiming an upper hand.

Recent polls show most Brazilians want to see both Rousseff and Temer out of office and new elections called. That is a possible outcome under three scenarios: Rousseff and Temer are both impeached or resign; the TSE annuls the 2014 elections based on accusations they were illegally financed; or congress passes a constitutional amendment that allows for snap presidential and congressional elections.

The basis for Rousseff's impeachment relates to claims of financial maneuvers aimed at obfuscating the country's financial health ahead of the 2014 elections, claims she denies. Last month, the supreme court obligated the lower house to also consider an impeachment request against Temer based on the same claims, which he also denies.

Both Rousseff and Temer also face proceedings in the country's electoral court TSE that could annul the 2014 elections, forcing new elections within 90 days. A decision in the TSE is not likely until 2017, at the earliest.

If both Rousseff and Temer resign, are impeached or have their 2014 election annulled, lower house president Eduardo Cunha would take over until new elections are called. Cunha is alleged to have received bribes in exchange for facilitating contracts with state-controlled oil company Petrobras.

Politicians allied with the government propose amending the 1988 constitution to cut short the terms of elected members of Brazil's legislative and executive branches and allow for new elections. Senior politicians, many under investigation for corruption, say the change could be done in time to allow for federal elections alongside municipal elections in October 2016.

Critics say the proposal is impractical and only being proposed to muddle the already complex scenario surrounding the impeachment push.

Popular former president Luiz In?cio Lula da Silva, known as Lula, a founding member of Rousseff's left-leaning Workers Party (PT) and Marina Silva of the center-left Rede party currently lead in polls for hypothetical new presidential elections.

Lula is currently under investigation for his dealings with some of the major Brazilian construction firms tied to Petrobras corruption, allegations he denies.

Last month, Rousseff appointed Lula as her chief of staff, a position that provides her successor and mentor with a high level of judicial immunity. That appointment was quickly blocked by a supreme court justice and is not expected to be decided by the full court until 20 April.

Federal prosecutor Rodrigo Janot has recommended the court block the appointment, claiming it was made with the intent to disrupt the colossal Lava Jato investigation into systemic corruption at Petrobras.

Silva, a Lula prot?g? like Rousseff, ran for president in the 2014 elections but failed to make it past the first round of voting.

Investors say the political uncertainty is exacerbating Brazil?s economic problems, and that a transitional government led by Temer is the most positive scenario for resuscitating the country's short-term prospects. But the approval rating for a hypothetical Temer presidency is stuck at around 16pc, raising concerns that he may lack the political capital needed to marshal unpopular austerity measures.

Last night, a practice speech Temer recorded in anticipation of the impeachment was leaked to the local press. In it, Temer outlines his plan for the transition government, focusing mainly on the preservation of popular welfare programs but also calling for unity around "sacrifices" needed to pull Brazil out of the malaise.