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New Brazil Government Aims to Fix Economy

By on May 13, 2016

BRASILIA, Brazil – Brazil’s new interim president, Michel Temer, held his first official Cabinet meeting on Friday after vowing the new team would try to rescue the country’s plunging economy at a moment of profound political confrontation.

The gathering at the government headquarters followed a chaotic day that saw the Senate vote to impeach President Dilma Rousseff, suspending her from office and abruptly ousting nearly her entire government – a move she branded “a coup.”

Brazil's acting President Michel Temer addresses the nation in Planalto presidential palace in Brasilia, Brazil, Thursday, May 12, 2016, after the Senate voted to suspend President Dilma Rousseff pending an impeachment trial. In his first words to Brazilians as acting president, the former vice president promised to beef up the fight against corruption, and in particular said he will support the sweeping investigation into a mammoth kickback scheme at state oil company Petrobras. Temer himself has been implicated by witnesses in the probe, though he has not been charged. (AP Photo/Felipe Dana)

Brazil’s acting President Michel Temer addresses the nation in Planalto presidential palace in Brasilia, Brazil, Thursday, May 12, 2016, after the Senate voted to suspend President Dilma Rousseff pending an impeachment trial. (AP Photo/Felipe Dana)

Temer moved quickly to announce his new team, whose star appears to be Finance Minister Henrique Meirelles, widely respected for serving as Central Bank chief during the boom years from 2003 to 2010.

“Our biggest challenge is to staunch the process of freefall of our economy,” Temer said at a swearing-in ceremony Thursday for his 22 Cabinet ministers. “First of all, we need to balance our public spending. The sooner we are able to balance our books, the sooner we’ll be able to restart growth.”

He also promised to support the widening investigation into corruption at the state oil company that has already ensnared leading politicians from a variety of parties and even implicated Temer himself – as well as several members of the new Cabinet.

His choice of ministers also raised criticism for its makeup: All its members are middle-aged or elderly white men – a particularly sore point in this majority non-white country. Six women, including one black, were included in the 39 members of Rousseff’s Cabinet when she began her second term last year.

Temer made a bid for peace with Rousseff, offering his “institutional respect” for the suspended leader, who continues to live in the presidential residence even as her replacement holds down the government offices.

“This is not a moment for celebrations, but one of profound reflection,” he said. “It’s urgent to pacify the nation and unify the country. It’s urgent for us to form a government of national salvation to pull this country out of the serious crisis in which we find ourselves.”

Rousseff, however, vowed to fight her ouster, calling it “a coup” led by a social and economic elite that had been alarmed by the policies of her leftist Workers’ Party, which had held power for 13 years.

Rousseff warned that Temer plans to dismantle government social programs that benefit around one-fourth of the Brazilian population. He insisted the programs would be maintained and “perfected” under his leadership.

But his choice to lead the Social Development Ministry, Osmar Terra, acknowledged that could be tough.

“What President Michel is proposing is that those programs be the most sheltered (from cuts). But if the budget hole is very big, we’ll see,” he said. “The country is bankrupt.”

Rousseff, whose popularity plummeted amid the worst recession since the 1930s, is accused of using illegal accounting tricks to hide large deficits in the federal budget. Opponents argue that damaged the country, but Brazil’s first female president called it baseless pretext by the elite to snatch back power.

The economy has been predicted to contract nearly 4 percent this year after an equally dismal 2015, and inflation and unemployment are hovering around 10 percent, underscoring a sharp decline after the South American giant enjoyed stellar growth for more than a decade.

Rousseff will be suspended for as long as 180 days pending a trial in the Senate. If two-thirds of the 81 senators vote to find her guilty, Temer would serve out the remainder of her term, which ends in December 2018.

Temer, the longtime leader of the centrist Democratic Movement Party, had been Rousseff’s vice president as part of a coalition of convenience that broke down under the strains of economic woes and corruption scandals. He is known less for a specific ideological stance than for its skill at backroom deal making.

The scandal at Petrobras revealed deep-seated corruption that cuts across the political spectrum in Brazil and has entangled top officials from the Workers’ Party and the opposition alike as well as top businessmen.

Temer has been implicated by witnesses in the scandal, but he has not been charged. The impeachment drive’s main motor, former House Speaker Eduardo Cunha, has been charged in the scandal and was suspended last week as speaker over allegations of corruption and interfering with justice.

Several of Temer’s Cabinet appointees have also been hit with corruption charges and other allegations.

The acting president pledged that the investigation will continue unfettered. “It deserves to be followed closely and protection against any interference that could weaken it,” he said.

The Associated Press

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