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2017, o ano dos sete riscos

Brazilian Cabinet Member Geddel Vieira Lima Resigns, comentários de Thiago de Aragão

The Wall Street Journal – 25/11/2016

Comentários de Thiago de Aragão


A fresh scandal roiled Brazil’s political establishment on Friday, after a key cabinet minister resigned amid allegations President Michel Temer had tried to help him in a property deal.

Brazil’s markets and its currency dropped sharply in early trading before regaining ground.

Markets feared the turmoil could derail Mr. Temer’s push for unpopular austerity measures needed to close a massive budget gap, Reginaldo Galhardo, foreign exchange manager at the Treviso brokerage in São Paulo, said.

“The political scenario in Brazil is the main driver of market behavior today,” Mr. Galhardo said. “Investors are nervous.”

Opposition parties seized on the news, calling for an impeachment inquiry into the president’s alleged misuse of power.

Mr. Temer has denied wrongdoing.

Geddel Vieira Lima, the government secretary in charge of the administration’s relations with congress, sent a letter Friday to Mr. Temer’s office saying he was stepping down. He denied wrongdoing.

Mr. Lima is the owner of an apartment in a luxury residential tower under construction in the northeastern Brazilian city of Salvador. Work on the project was halted this month after the Institute of Historic and Artistic National Heritage, an agency linked to Brazil’s Ministry of Culture, raised objections to the structure’s potential impact on a neighboring historic district.

Culture Minister Marcelo Calero told reporters last week that Mr. Temer called to pressure him to allow construction on the apartment tower to proceed. Mr. Calero then promptly resigned. According to local media reports, Mr. Calero recorded his conversations with Mr. Temer and has turned them over to federal police.

Mr. Calero couldn’t immediately be reached for comment. The federal police didn’t immediately respond to a request for comment.

A spokesman for Mr. Temer confirmed in a statement Friday that the president had indeed spoken to Mr. Calero, with the intent of resolving a potential conflict between Mr. Calero and Mr. Lima.

Mr. Temer on Thursday denied through a spokesman that his contact with Mr. Calero was inappropriate or an attempt to interfere in the construction matter.

Political scientist Carlos Melo said that Mr. Temer’s actions created the impression that he was intervening on behalf of Mr. Lima, a key ally and fellow member of the ruling Brazilian Democratic Movement Party who is tasked with pushing the administration’s reform agenda through congress.

”The president made a mistake,” said Mr. Melo, who teaches at the Insper school of business in São Paulo. “It causes a big problem with public opinion” at a crucial time for the administration.

An October public opinion poll showed that only 14.6% of Brazilians consider Mr. Temer’s performance “good” or “great.”

On Friday, Mr. Temer’s political opponents vowed to file impeachment charges against him, raising the prospect of divisive battle in an already polarized country.

But some Brasília veterans doubted such efforts would advance in a congress where Mr. Temer currently enjoys strong support among lawmakers.

”It’s another distraction,” said Thiago de Aragão, a political scientist at Arko Advice in Brasília. “The departure of (Mr. Lima) ends the problem.”

After declining sharply on the opening, Brazil’s assets regained ground. In early afternoon trading, the main local stock index, the Ibovespa was up 0.12%. The real was trading at 3.41 to the dollar, after closing at 3.3938 on Thursday.

”The political scenario in Brazil is the main driver of market behavior today,” said Reginaldo Galhardo, foreign exchange manager at the Treviso brokerage in São Paulo. “Investors are nervous.”