Brazil Opens Impeachment Proceedings Against President Rousseff

Brazil’s economy shrank by a record 4.5 percent year-on-year in the third quarter, new figures revealed yesterday, deepening the country’s sharpest recession in 25 years and adding fuel to opposition fires targeting President Dilma Rousseff as she struggles to close a growing fiscal deficit and contain a vast corruption scandal.

If the commission approves the impeachment proceedings, it then moves to a full vote in the lower house where two-thirds of deputies must approve it.

Eduardo Cunha’s decision to fire the starting pistol marks a first tentative step in a process that, even if supported by Congress, could take months, though some analysts suggest the president may feel forced to resign before it is completed. “There are no rumors that I have diverted public funds, I have no bank account overseas, and I didn’t hide any personal property from the public”.

Dec 3 Emerging market stocks extended losses on Thursday after the Federal Reserve chief reinforced the case for an interest rate hike while Brazilian assets overseas gained as lawmakers started impeachment proceedings against President Dilma Rousseff.

Despite re-election previous year, her popularity has slumped amid a corruption scandal involving the state-owned oil giant, Petrobras.

In a televised tackle to the nation, Rousseff expressed her “outrage” at Cunha’s determination and stated there was not a grain of proof or suspicion of any wrongdoings by her.

Mr Cunha had been threatening to open impeachment proceedings if the governing party did not offer him backing, says the BBC’s Julia Carneiro in Rio de Janeiro.

It is not clear if Rousseff’s foes have the votes to remove her from office but the process could force further political wrangling and uncertainty, complicating her efforts to push austerity measures through Congress and encourage investment.

Brazil’s gross domestic product fell at a 1.7% quarter-on-quarter clip, leaving it 4.5% below last year’s level.

“The court of audit is looking into allegations that the government illegally bumped social security payments on to state banks to dress up the fiscal balance sheet, which if proven could also lead to impeachment procedures”.

Jorge Arbache, a professor of economics at the University of Brasilia, says that Brazil is going through one of its worst ever economic crisis.

When news came early on Wednesday that the committee members from the PT, Rousseff’s party, would be voting to recommend Cunha’s removal from the speakership, the stalemate broke down. “The pressure against her will be huge”.

In a decision being seen as retaliatory, the speaker of Brazil’s Lower House accepted a request to begin impeachment proceedings.