Temer claims support for austerity in Brazil

Still in her residence, ousted Rousseff criticizes the all-men, all-white, conservative Cabinet

BRASILIA — Brazil’s centre-right interim government pledged yesterday to take on potentially thorny reforms if it sees them necessary to jump-start the stalled economy, even as the country’s provisional President Michel Temer came under increasing fire for appointing an all-white, all-male, mostly conservative Cabinet.

Presidential Chief of Staff Eliseu Padilha said the incoming government understood it was only provisional for now and had ordered portraits of Rousseff to be left hanging in federal buildings.

Temer was sworn into office on Thursday after Rousseff was suspended from office by the Senate for up to 180 days while she is tried on charges of breaking budget rules.

Rousseff, ousted from the presidential palace but still living in her official residence Alvorada in Brasilia, took to the offensive, telling foreign reporters in her residence that she had been dislodged by an "illegitimate" and "extremely conservative" government.

“We, fifteen months ago suffered all sorts of sabotage against our governance,” she said. “There was a systematic blockage to create the proper climate for the coup,” she said.

Padilha said the Workers’ Party leader had left Brazil with unprecedented levels of fiscal deficit and public debt, and most Brazilians are aware that hard measures are needed to pull the country out a severe economic recession. The official showed confidence that the political support for tough measures can secure a permanent mandate once centre-leftist Rousseff's impeachment trial is over.

“We have enough support to pass urgent measures through Congress,” he told a news conference following the government's first cabinet meeting, pointing to the distribution among nine political parties of 23 ministerial posts in a slimmed-down cabinet.

Despite having no electoral mandate, Temer promptly unveiled on Thursday an agenda of conservative reforms — including cuts to public spending and pension reforms — that would swing Brazil to the right after 13 years of leftist Workers Party rule.

To start with, Planning Minister Romero Juca announced that 4,000 jobs would be cut from the federal government payroll by the end of the year.

Juca said reforms to Brazil's pension and tax system were crucial to getting public debt under control in the midst of Brazil's worst economic crisis ever, though he said Temer would avoid the kinds of drastic measures that fueled popular anger in debt-strapped Greece and Italy.

Meaningful pension reform has eluded governments of all stripes, even when they had strong mandates. The pension system costs the state a crippling 13 percent of gross domestic product, more than any G7 nation except Italy.

Putting Brazil on a path to growth again is considered a priority after a crisis brought on by the end of the commodities boom and aggravated by a massive corruption scandal surrounding state-run oil company Petrobras.

Brazilians have taken to the streets in record numbers in recent years to protest against inefficient and corrupt government and they will reward a government that can restore confidence and investment, Temer's ministers said. “We are convinced that we are going to do such a good job governing that the government that is provisional today will become definitive before 180 days are up,” Padilha said.

The margin of the vote in the Senate to suspend her, 55 to 22, showed Temer's government currently has support in Congress needed for a series of tough economic reforms, Padilha said.

A two-thirds vote in the upper house is needed to convict Rousseff and remove her from office permanently. Temer would then complete her term until 2018.

Earlier, Finance Minister Henrique Meirelles said the government would unveil tough measures soon to curb a budget deficit that topped ten percent of GDP including taxes temporarily.

The gaping fiscal deficit cost Brazil's its hard-won investment grade credit rating last year, further undermining investor credibility in the Latin American nation's policies.

Experts have voiced concern that cutting public spending and raising taxes could further shrink a once-booming economy, which is on track in 2016 for a second year of contracting by more than 3 percent — its worst performance since the 1930s. The economy has been predicted to contract nearly four percent this year after an equally dismal 2015, and inflation and unemployment are hovering around ten percent, underscoring a sharp decline after the South American giant had long enjoyed stellar growth.

The Workers’ Party has vowed to organize mass protests against Temer, whom it has dubbed a traitor, and to derail his legislative agenda in Congress. “We are certainly going to put up fierce opposition to some of these proposals,” Workers’ Party Congressman Paulo Pimenta said in an interview.

Bitter welcome

In a sign of opposition to Temer's government, his Education Minister Jose Mendonça was received with boos by employees protesting the elimination of the Culture Ministry.

Following the most unpopular Brazilian president in a generation, Temer can tap into a widespread feeling that things couldn't get any worse.

Rousseff, Brazil’s first woman president, also lashed out at Temer’s Cabinet choices, saying the appointees were an accurate reflection of the demographic he would be governing for this majority non-white nation’s traditional white elite.

“I lament that after a long time there are no longer women or blacks in the ministries,” said Rousseff, whose own Cabinet at the start of her second term included six women, including one black woman. “I think gender questions are a question of democracy in a country where the majority, more than fifty percent, are women.”

Temer’s cabinet choices have also come under fire for including people who face serious allegations. At least nine of Temer’s 22 appointees have faced or are facing allegations of corruption and other wrongdoing, including in the sprawling graft probe that saw billions of dollars syphoned out of Brazil’s state-run oil company, Petrobras.

Many top figures in Rousseff’s left-leaning Workers’ Party were also swept up in the ongoing probe. While Rousseff herself has not been directly implicated, corruption inside her party also helped fuel widespread public anger against her, analysts say.

Temer himself has been implicated by witnesses in the Petrobras scandal, but he hasn’t been charged. Former House Speaker Eduardo Cunha, another top official in Temer’s Democratic Movement Party is facing charges in connection with the probe, and other top party brass are in being examined by investigators.

Herald with AP, Reuters