Austerity and scandal spark further protest plans in Brazil

Brazilians furious at corruption and demanding the impeachment of president Dilma Rousseff will hold another round of protests tomorrow as Rousseff's unpopularity spirals amid a deepening political and economic crisis.

Groups organising on social media have pledged to follow up on demonstrations held last month, the biggest since the return of democracy in 1989, by holding marches in dozens of large cities.

Their demands range from calls for action against entrenched corruption, as evidenced by the scandal in the state-controlled oil giant Petrobras, to appeals for a military coup by some of the hard-right factions that first mobilised against the president shortly after she was re-elected last October.

But despite a recession that is intensifying thanks to a punishing austerity programme, and despite increasing signs that Rousseff has lost control over her own administration in Brasília, observers say there is less intense online activity ahead of tomorrow’s marches than there was a month ago.

“Anything could happen, but we do not see the same levels of motivation as we saw ahead of March 15th, when the streets were boiling,” says André Pereira César, a political analyst in Brasília.

Whatever the turnout tomorrow, the crisis has continued to erode the president’s standing. Latest opinion polls show that two-thirds of Brazilians now consider her government “bad or terrible” and three in four say they have no confidence in her. The discontent has spread to regions that backed her heavily in last October’s presidential elections.

Efforts stymied

Rousseff’s efforts to set a positive agenda have been stymied by the ongoing investigation into corruption at Petrobras, which continues to dominate headlines. The treasurer from her ruling Workers’ Party, João Vaccari, has been formally charged with corruption and money laundering after prosecutors said they had “ample proof” that he solicited donations from companies in return for Petrobras contracts.

Vaccari’s testimony before a congressional committee on Thursday was briefly interrupted after an employee released rodents in the committee room in protest at government corruption. In seven hours of testimony, Vaccari denied any wrongdoing. Earlier this week, Rousseff told CNN Español that she was “sure my campaign had no money from bribery”.

The president’s popularity is also being undermined by the growing social impact of austerity policies, which she promised to oppose during last year’s election. Inflation has jumped to 8.13 per cent, soaring above the central bank’s target of 4.5 per cent, as unsustainable subsidies for fuel and electricity are unwound, resulting in big jumps in consumers’ monthly bills.

Rising unemployment

After years hovering around record lows, unemployment is also on the rise and now stands at 7.4 per cent as companies lay off increasing numbers of workers. This undermines a key claim by the president, that under her watch the fiscal adjustment would not hurt working families.

Rousseff has increasingly seemed to be a bystander, having been forced to hand over economic policy to her finance minister, Joaquim Levy, who is charged with sorting out the chaos in the public accounts caused by her personal command of the economy during her first term.

A Chicago-trained economist, Levy’s slashing austerity drive is slowly winning back the confidence of markets but has alienated the president’s own base in the Workers’ Party and among trade unions and left-wing social movements, many of which are demanding that she sack him.

Instead, this week, it was her close friend and ally Pepe Vargas that the president was forced to sack from his job of managing relations between her administration and the congress. The role was turned over to vice-president Michel Temer in a bid to quell a rebellion among coalition allies.

Temer is a member of the populist Brazilian Democratic Movement Party (PMDB), whose leaders in congress are now agitating against the president’s programme despite nominally being her principle allies.

Vargas’s sacking leaves the president and her Workers’ Party further isolated in Brasília and increases the power of the PMDB within the government, despite the fact that several of its leaders are charged in the Petrobras scandal.

“Dilma has clearly lost strength,” says political analyst César. “She is hoping once the economic crisis is resolved in a year, or however long this takes, she can resume control again. But until then she will have to accept this redistribution of power to Levy and PMDB.”