Last week, Brazil finally made some headway in its struggle to extract itself from the quagmire created by the impeachment of President Dilma Rousseff in May. For months, the interim government of Michel Temer, Rousseff’s vice president, had been at an impasse. The forces in Congress that had ousted Rousseff were divided, so Temer’s team had been unable to push through desperately needed economic reform. Under Rousseff and the populist Worker’s Party (PT), centralizing statist policies pushed unemployment to 12 percent, and public debt soared. Private investment shrank and state revenues dried up, slowing public works. Growth fell three percent in 2015 and is still eroding. As interim president, Temer’s mandate had included arresting the economy’s free-fall.
Although he had been elected on the same ticket as Rousseff, Temer belongs to a different political party, the Brazilian Democratic Movement (PMDB). Their coalition has always been uneasy, based more on pork barrel politics than ideological affinity. In January, Temer wrote to Rousseff that the PMDB was dissatisfied with the government’s economic decision-making and announced that the party would take an “independent” course. The split ended the PT control of the Congress and reduced Rousseff’s government to a partisan minority, which opened her to the later impeachment based on corruption charges.
A breakthrough finally came on July 12 with the election of a new president of the Chamber of Deputies, the lower house of Congress. The post was vacant in the wake of a long-running anticorruption campaign led by Federal Judge Sérgio Moro and federal prosecutors. The investigators accused major contracting firms and politicians from various parties, including the ruling PT and its key partner, the PMDB, of criminal collusion to finance political and personal gain from funds fleeced from public contracts.
One of the principal operators of this scheme was identified as Eduardo Cunha, the PMDB president
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