Meanwhile, Brazilian assets listed in Europe notched up solid gains after parliament launched impeachment proceedings against President Dilma Rousseff on Wednesday.
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Speaker Eduardo Cunha opened impeachment proceedings against Rousseff on Wednesday, citing a court’s finding that her administration violated fiscal responsibility laws by using money from state-run banks to fill budget gaps and pay for social programs.
A special committee with members from all parties will decide on the merits of the request, which needs two-thirds, or 342, of the votes in the lower house. “My past and my present attest to my integrity and my unquestionable commitment to the laws and public affairs”, she said.
Rousseff went on television to sharply reject Cunha’s accusations, and most analysts predicted she would survive.
But Cunha, a member of the Brazilian Democratic Party which is the top partner in Rousseff’s ruling coalition, is accused of taking millions in bribes related to the scheme, and has not bothered to hide his fury for the investigation against him by the government’s attorney general.
The move also threatens to paralyse Rousseff’s economic agenda as she focuses on saving her political life rather than reviving growth.
Unemployment and excessive inflation are anticipated to worsen within the first half of subsequent yr as Brazil’s recession deepens, which can create in style strain and even road demonstrations to push Congress to question Rousseff, he stated.
In the third quarter, the Brazilian economy contracted 4.5 percent on an annual basis, the steepest fall on record, official data showed on Tuesday.
The government is likely to legally challenge the impeachment, said Sylvio Costa, founder of the political news site Congress In Focus. Rousseff concluded by saying she believes the impeachment process against her will be shelved.
The move injects a new element of instability into the political landscape in Brazil, which is being roiled by corruption scandals and a sharp economic downturn.
Dec 3 Emerging market stocks extended losses on Thursday after the Federal Reserve chief reinforced the case for an interest rate hike while Brazilian assets overseas gained as lawmakers started impeachment proceedings against President Dilma Rousseff.
Two-thirds of the lower house must approve the process for it to proceed.
That could be a wild card for her as she fights for her political life.
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The proceedings will take over the agenda in Congress, leaving little room for fiscal austerity measures needed to balance Brazil’s overdrawn accounts and avert the loss of its coveted investment grade credit rating.
