Charges against President Temer likely to be shelved, but reforms keep stalled
Last week, President Temer’s administration savored the positive IMF changes in forecast regarding Brazil’s economy this year and the next, but from today on, it will again be engulfed by its customary political problems.
The House Constitutional Committee will likely vote this week in his favor and recommend that the floor shelve the second indictment request on charges of obstruction of justice and racketeering.
However, the vote will take place amid increasing divergences between the president and House Speaker Rodrigo Maia, who has been a strong ally of Temer throughout the recent tumultuous months.
Publicly, the rifts are justified by Maia on the grounds that the Speaker is unhappy with Temer’s postponement of economic measures due to his desire to avoid confrontation in Congress until charges against him are formally blocked by lawmakers.
In fact, most of Maia’s dissatisfaction comes from efforts by PMDB, which is Temer’s party, to lure politicians from DEM, Maia’s party, and other political groups to strengthen itself for next year’s general elections.
These altercations will likely make it more difficult to pass even the most watered-down version of a crucial pension reform before the end of this year. The consensus is that if a reform is not passed this year, it will be left for the next government, in 2019.
The IMF gave high praise to the performance of Temer’s economic team, but also warned that it is important to pass reforms that ensure “fiscal sustainability over time.”
Risk analysis agencies are blunter in their assessments. Standard & Poor’s explicitly said it could downgrade Brazil’s sovereign rating if social security reform is not passed to give the incoming administration some relief in 2019, and Moody’s said that failure to pass a pension reform would make it “easier” to decide on maintaining a negative outlook for Brazil’s sovereign rating early next year.More Testimonials