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Brazil's Rousseff loses ground in impeachment battle

Brazilian President Dilma Rousseff was left scrambling on Tuesday to avoid impeachment after a key coalition ally indicated he may desert her and opponents won control of the congressional commission examining her case.

[BRASÍLIA] Brazilian President Dilma Rousseff was left scrambling on Tuesday to avoid impeachment after a key coalition ally indicated he may desert her and opponents won control of the congressional commission examining her case.

Deputies either in open opposition or part of the ruling coalition yet favouring impeachment took 39 of 65 seats on the newly formed commission after a chaotic voting process that erupted in shouting and pushing.

This did not bode well for the moderate leftist president, who is fighting to survive just one year into her second term at the head of the world's seventh biggest economy.

The commission is charged with studying the case, then making a recommendation to the lower house of Congress, where a two-thirds vote would be required to put Ms Rousseff on trial in the upper house and possibly force her from office.

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Brazil's first female president is accused of illegal budgeting maneuvers, but says the practices were long accepted by previous governments. She calls the attempt to bring her down a "coup." On paper, Ms Rousseff has the numbers between her Workers' Party and main coalition ally PMDB to survive.

However, those calculations were thrown into doubt with the publication overnight of an angry letter from PMDB leader and Vice-President Michel Temer in which he all but announced their political divorce.

Mr Temer told the president that during her first term in office starting in 2011 he was reduced to a "decorative" role and that she has shown an "absolute lack of confidence" in him. If Ms Rousseff is forced from office, Mr Temer would become interim president.

The turmoil has alarmed markets, already bruised by recession and a huge corruption scandal centered on state oil company Petrobras.

Andre Perfeito, chief economist at Gradual Investimentos, said the "climate of war" suggested that "the impeachment process... will drag out for longer than initially thought."

Although Ms Rousseff has so far given no public reaction, Globo newspaper columnist Gerson Camarotti said "the government's interpretation is that Temer's letter was a declaration of a split."

Mr Temer's office insisted, however, he was not breaking with the government but rather "defending the reunification of the country," according to Globo.

As recently as Monday, the president said she believed Mr Temer would stand by her.

The unrest is stirring passions across the country of 204 million people, where the Workers' Party has been in power since 2003 with the help of its often uncomfortable partner the centrist PMDB.

In Congress, dozens of deputies nearly came to blows as they argued over procedures for voting the members of the commission. Some danced and waved a Brazilian flag, others shook their fists in opponents' faces, and Rousseff loyalists reportedly broke voting urns in their anger.

Both sides of the debate have promised to take to the streets in an attempt to pressure Congress during what could potentially turn into months of intrigue if the impeachment procedure goes the full course.

In Rio de Janeiro, several hundred trade union activists marched in support of Ms Rousseff late Tuesday, at one point letting off a deafening barrage of crackers that spewed orange smoke into a central avenue. Opposition groups have announced nationwide rallies for this Sunday.

Ms Rousseff has approval ratings of about 10 per cent and is widely blamed for a devastating economic slump.

Brazil, host of the 2016 Rio Olympics, is in a deep gloom, with GDP down 4.5 per cent in the third quarter year-on-year, and the national currency down a third against the dollar this year.

But she came out swinging last week after months of impeachment rhetoric in Congress ended with the launching of the process. She called on Congress to speed up proceedings and to scrap the annual holidays that run from December 23 through to February when the carnivals are held.

Also tainting Ms Rousseff is the Petrobras scandal, which has sucked in leading politicians and business figures, exposing the depth of corruption at the highest levels in Brazil.

Ironically, Ms Rousseff herself has not been linked to any Petrobras-related crimes, while the chief architect of the impeachment drive, the PMDB's Eduardo Cunha, who is house speaker, is accused of taking millions of dollars in bribes.