Taxes Hikes Jeopardize Temer’s Dwindling Support
In another bold political strike, President Michel Temer has raised taxes to cover this year’s budget gap, risking losing support from the last significant social sector backing his administration: the business community.
Taxes on fuels were almost doubled, which according to analysts may endanger the solid fall of inflation registered in the last few months. The government also increased its spending freezes, a measure likely to aggravate the disruption of several public services and add to Temer’s already enormous unpopularity, his public approval rate is currently at 7%.
The powerful FIESP – Federation of Industries of the State of Sao Paulo – immediately protested the measures, although sparing the president and blaming Finance Minister Henrique Meirelles instead. Other class associations are expected to join the complaints led by Sao Paulo manufacturers.
Despite the turmoil, markets remain cool and foreign direct investments keep flowing into the country. Last week the exchange market registered a US dollar devaluation and the stock market index rose.
Temer’s opposition has been unable to convene large street demonstrations to protest the administration, not even those called to support former President Lula, who was recently convicted to a 10 year jail term.
Therefore, unless new details surface against Temer this week, it is probable that the president will be able to block the indictment against him, scheduled to be voted by Congress’ lower House on August 2. However, his victory will be measured not by being able to dismiss the accusation, but by the margin of votes he is able to get to achieve it.
If he does not hold an expressive sum of votes, this will mean he will be vulnerable to future imminent indictment requests from the Prosecutor General Office. Some believe he will postpone the decision by leading his allies to deny the minimal quorum required if he feels an expressive result is unachievable.
In any case, there seems to be enough confidence among all relevant social forces that no matter what happens to Temer, the coalition that now supports him will basically hold together closing ranks House Speaker Rodrigo Maia, who would take over the Presidency in case the indictment is accepted and Temer suspended for a Supreme Court trial.More Testimonials