Last chance for Brazil's Rousseff to save mandate: newspaper

[RIO DE JANEIRO] Brazilian President Dilma Rousseff has one last chance to stem a growing political and economic crisis before being forced to step down, one of the country's leading daily newspapers said on Sunday.

In an unusual front-page editorial, Folha de S.Paulo said Ms Rousseff needs to take "drastic measures" including additional spending cuts and tax increases to make up for a 2016 budget gap that has cost Brazil its investment-grade rating from Standard & Poor's.

Ms Rousseff, a leftist who was re-elected by a thin margin in 2014, is facing impeachment calls as her government struggles with a deep economic recession and a massive corruption scandal at state-run oil company Petrobras that has implicated several of her political allies.

In cabinet meetings on Saturday and Sunday, Ms Rousseff ordered her ministers to find an additional 20 billion reais (S$7.32 billion) in budget savings, Brazilian media said. The cuts will be announced as early as Monday, according to several reports.

Earlier, daily Estado de S.Paulo reported that Ms Rousseff had decided to cut at least 15 billion reais of next year's budget, which was sent to Congress with a deficit of about 30 billion reais.

Folha, which tends to lean center-right, said deep budget cuts are needed for the government to gain credibility before demanding more tax hikes that will face strong popular opposition.

"The country, however, has no choice" but to accept higher taxes, Folha said. "Neither has President Dilma Rousseff: if she bends under the weight of the crisis, she will have no option other than leaving her presidential duties and, eventually, the position she holds." Folha also called for an end to some pension benefits and economic subsidies, as well as temporary cuts in health and education programmes that are currently mandatory.

A spokeswoman for Ms Rousseff declined to comment on the editorial.

REUTERS