SAO PAULO (Reuters) – Huge demonstrations against President Dilma Rousseff over the weekend will make it harder for her to fix Brazil’s finances and repair the economic damage from a corruption scandal at state-run oil company Petroleo Brasileiro SA.
About 1 million people took to the streets in two dozen cities on Sunday, a much larger turnout than expected, to call for the impeachment of the leftist president and vent their anger over the billions of dollars allegedly misappropriated on her watch from Petrobras, as the company is known.
Rousseff is seen as safe from any impeachment threat for now since it is unlikely her opponents could marshal the necessary two-thirds of votes in both chambers of Congress. Yet unlike demonstrations that swept Brazil in 2013 over a wide range of grievances from bus fares to spending on the 2014 soccer World Cup, Sunday’s were focused only on Rousseff, meaning the damage to her political capital is much greater.
As such, the protests are likely to impair Rousseff’s ability to push tough budget cuts and tax hikes through an increasingly hostile Congress. If she fails, Brazil may lose its investment grade credit rating – which would deepen the moderate recession already expected for this year. The anti-corruption tone of Sunday’s protests will probably also make it harder for Rousseff to forge a compromise deal that would allow construction companies swept up in the Petrobras probe to resume normal business.
Prior to the protests, Rousseff’s popularity was already at an all-time low, with only 23 per cent of Brazilians describing her government as “great” or “good.” Many believe that number may fall further in new polls expected this week.
