Brazil’s markets jumped 3 per cent today as investors greeted news of plans to impeach President Dilma Rousseff with relief.
Yesterday, impeachment proceedings were opened by the speaker of the lower house, Eduardo Cunha, one of the most powerful sitting politicians and now Rousseff’s arch nemesis.
Proceedings have been launched on charges that Rousseff broke Brazil’s fiscal laws by manipulating government finances to benefit her re-election campaign last year.
The news means that a vote will be held in the lower house to suspend Rousseff. If two-thirds agree, the case will move to the Senate where a 90-day trial will be staged. Another vote requiring a two-thirds majority will decide whether to remove the President from office.
BRAZIL IN STRIFE
The news was greeted warmly by markets as the IBovespa stock market rose 3.75 per cent today, and the Brazilian real – which has fallen heavily this year – strengthened 1.4 per cent. Some of the market’s rise will be down to investors closing short positions held on the expectation there would be more bad news for the country.
Brazil’s economy has slid into a deep recession – the worst since the Great Depression – while a state of political paralysis has been reached after a corruption scandal of epic proportions has been unravelling at state-run oil company Petrobras. The saga has led to public outrage as dozens of politicians and business leaders have been arrested through the investigations into the $3bn that has been embezzled from Petrobras.
Rousseff has faced calls for her impeachment all year. There were several days of mass protest staged across the country this summer, with tens of thousands taking to the streets demanding she be impeached. Her approval ratings have sunk to single digits just less than year into her second four-year term.
Rousseff responded to the impeachment proceedings with anger in a televised address. “I’ve received with indignation the decision by the head of the lower chamber [Cunha] to launch the impeachment process,” she said.
She added: “I’ve committed no illicit act, there is no suspicion hanging over me of any misuse of public money.”
Rousseff also said she has no “hidden assets” or offshore accounts, in a reference to the Petrobras scandal which has dragged in politicians of all stripes this year.
Cunha himself is not whiter than white, as he was arrested as part of the Petrobras probe amid accusations he hid $16m in offshore bank accounts. He had been holding off from accepting the impeachment petition from the opposition for several months.
Presidential impeachment is not new for Brazil. In 1992 President Fernando Collor was impeached after bribery accusations.