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 The business community worries that a traumatic ouster would pile a
period of deep political uncertainty onto a downturn that economists
say could translate into a 2 percent contraction of the economy this
year.
That tacit support of big business and a tentative deal with a
restive Senate is helping Rousseff survive a crisis just seven
months into her second four-year term.
"An impeachment is a traumatic affair that affects the political and
business arenas at a time when Brazil is struggling to regain its
credibility abroad," said Alencar Burti, president of the Sao Paulo
state Federation of Chambers of Commerce, which represent some
200,000 business owners.
"What matters now is saving our country. We need to find a solution
above personal interests."
Though some businessmen have told lawmakers that an impeachment
would help Brazil regain credibility, most see few gains from the
uncertainty it would likely bring.
Earlier this month, Brazil's biggest industrial groups and most
powerful media corporation, Globo Comunicacao e Participacoes SA,
called for a political deal to secure stability.
But while they may not want her impeached, many investors hope
Rousseff's weakened political state will force her to abandon her
interventionist economic policies for good.
Under intense pressure from Congress, Rousseff last week embraced a
business-friendly agenda proposed by Senate chief Renan Calheiros.
Such a plan had long been demanded by companies struggling with the
country's notoriously tangled red tape and byzantine tax system.
The measures includes fast-tracking environmental permits,
simplifying taxes and bolstering guarantees in contracts with the
state. The plan, which is yet to be debated in the Senate, could
bring down costs for companies ranging from retailer GPA SA to
miners like Anglo American Plc and even embattled engineering firms
such as Odebrecht SA [ODBES.UL].
Although Rousseff scored political and court victories last week
that made an impeachment vote in Congress less likely in the short
term, it still looms as a threat as her opponents press allegations
she took illegal campaign donations and doctored public accounts.
A Datafolha poll published on Aug. 6 showed two out of three
Brazilians say Rousseff should be impeached. Her approval rating was
8 percent, as her popularity plunged to the lowest of any president
since Brazil returned to democracy 30 years ago. Hundreds of
thousands of Brazilians took to the streets on Sunday to call for
her ouster.
The upheaval is already hurting businesses.
In the second quarter, the number of companies ruling out
investments over the next 12 months surpassed those considering new
capital expenditures, the worst result since the Getulio Vargas
Foundation started the investments survey in 2012. The survey's
coordinator, Aloisio Campelo, said the political noise is making
companies more wary of new investments.
[to top of second column] |
FROM CRISIS TO CHANGE?
Rousseff, of the leftist Workers Party, has struggled to control its
motley alliance in both the Senate and the Lower House, which is led
by the Brazil Democratic Movement Party. She also needs business on
her side - throughout Brazil's turbulent years of democracy, the
business elite has traditionally been a power behind the throne.
Rousseff is organizing a meeting with the heads of the country's
biggest companies as early as this week, seeking support in trying
to revive the economy, government officials told Reuters.
Finance Minister Joaquim Levy, seen by many in financial markets as
her government's remaining anchor of credibility, already met with
senior executives of top lenders such as Itau Unibanco Holding SA
and Banco Bradesco SA, sources familiar with the meeting said.
Rousseff, a technocrat and ally of former leftist president Luiz
Inacio Lula da Silva, has had rocky relations with big business
since she first took office in 2011.
Though during her first term Rousseff bestowed dozens of billion of
dollars in cheap loans for Brazilian corporations to expand abroad,
her involvement in the contracts of electricity producers and
imposition of low rates of return in road projects angered many
executives.
Since her re-election last October, Rousseff has eased her
intervention in the economy and opted for more a orthodox approach
that included fiscal austerity. She is now adopting the Senate's
pro-business agenda to get Congress on her side.
"Her fragility could pave the way for a modernization drive that
brings forward measures that have been dormant for a long time,"
said Leonardo Barreto, head of political consultancy Mosaico.
The measures could also help recover some lost market confidence.
"This new agenda arrived late, but at least it puts something on the
table that could help bring back confidence," said Paulo Protasio,
head of Rio de Janeiro's Chamber of Commerce. "This could change the
mood, but we need to see it materialize."
($1 = 3.4766 Brazilian reais)
(Additional reporting by Guillermo Parra-Bernal and Anthony Boadle;
Editing by Frances Kerry)
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