I am strong, and I won’t be bullied by false accusations. I do not intend to leave power. This is what we heard from Brazilian president, Dilma Rousseff, just a few weeks ago as the economic and political storms grew larger in Brazil. This week, Rousseff’s tone has changed radically as she has been obligated to split the loot with her political adversaries to avoid her imminent fall from the presidency.
Dilma has shuffled eight of her Ministries and by doing so, she has given more power to the Democratic Movement Party of Brazil (PMDB). Beset by the economic crisis, threatened by the markets, crushed by polls and harassed by the opposition, Dilma of the Workers Party (PT), is closing one of its many fronts to save her term with a cutting measure:
She yielded political power to her fickle allies in parliament. All members of the ideologically ambiguous PMDB in exchange for a stable support in Congress. Right now, Dilma needs some unity if she wants to approve the extreme austerity measures that her Finance Minister, Joaquim Levy, intends to pass in order to stop the mounting distrust of the markets and government creditors.
The president appeared before the country to formally announce that she decided to reform her Cabinet and that seven ministries would change hands to the PMDB, one more than the party had so far. Among the new ministries in the hands of the PMDB is the emblematic Ministry of Health, which has the largest budget in the country.
The weight of the PMDB in the cabinet is even greater when one considers that Rousseff, in a measure of adjustment, eliminated eight ministries, 39 to 31. Vice President Michel Temer, PMDB also continues in his post exercising the difficult task of bridging the gap between the parliamentary group of the PMDB, instrumental in passing laws, and the government, that urgently needed favorable Parliament results to pass a list of fiscal measures supposedly designed to redress the economic situation and to reassure investors and markets.
On September 9, the rating agency Standard and Poor’s downgraded the country’s credit rating to junk status in a media thud that shook the country and made it wake up about the long gone feeling of prosperity that the Brazilian society thought it was living in over the past decade.
The relationship between members of the PMDB and the Government has been ambivalent since Rousseff began her second term. On the one hand, their presence in the government and the slow and conciliatory personality used by Temer guaranteed some support. On the other, the hostility of the President of the Brazilian Congress, Eduardo Cunha, a declared enemy of the government and Rousseff and his influence on many deputies, made Rousseff’s economic plan crumble.
Cunha, increasingly challenged by news of his involvement in the Lava-Jato scandal, was shocked after it was discovered that he had opened a shadow bank account in Switzerland with $5 million in it. Cunha says he is innocent and says he is being the subject of a political witch-hunt by the government.
Now, Rousseff will see how her changes will fair next week when she announces a new round of budget cuts. But the ministerial reform not only pursues that stability, it also affects the Rousseff-PT game.
Minister of the Civil House, Aloizio Mercadante, a sort of Prime Minister for Rousseff, has now been placed at the Ministry of Education. In his place, Rousseff appointed Defense Minister Jaques Wagner, a man of more confidence for Dilma’s godfather, Luis Inacio ‘Lula’ da Silva. The influence of the former Brazilian president in all this change is, according to the Brazilian press, obvious.
Lula has not been able to escape the corruption scandal in the country. A former assistant of his made public what appears to be an email where he says that Lula lobbied for Oldebrecht, a construction company whose corporate head has been accused of corruption in the Petrobras scandal.
The newspaper O Estado de S. Paulo recently published a revealing photo, which was taken in the Alvorada Palace in Brasilia, the official residence of Rousseff, with Lula himself walking next to a PT leader, a few steps behind the president.
Rousseff also announced a series of measures to contain spending in ministries aimed at giving the impression that the government itself is going through austerity: ministers salary were reduced by 10%. In addition, 3,000 municipal positions were cut in various cities and plans were developed to save on rent, cost of electricity, water and phone usage.