Impeachment proceedings have been opened against Brazilian President Dilma Rousseff.
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Lower house leader Eduardo Cunha on Wednesday accepted a petition against Rousseff based on accusations her government broke budgetary rules.
While impeachment is expected to get by the commission, most political analysts say it’s unlikely to get the two-thirds vote of the lower house that would remove her from office temporarily. If that happened, Rousseff would be replaced for six months by her vice president while the Senate considered whether she should be permanently removed as president.
Rousseff denied any wrongdoing and said she was indignant at the accusation.
Brazil’s investment rate fell to 18.1 percent of GDP, down from 20.2 percent in the same period a year ago.
Finally, even if President Rousseff is impeached, it’s not necessarily clear that this would be market-negative, since the leader is as unpopular with investors as she is with the Brazilian public, argues Capital Economics.
Already struggling with weak popularity over Brazil’s economic ills and a political corruption scandal, President Dilma Rousseff now must fight an impeachment effort launched by a political foe who heads Congress’ lower house.
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.
It will be the first analysis of an impeachment proposal since 1999, when the then president Fernando Henrique Cardoso (PSDB) managed to see off a similar initiative.
The impeachment request, which accuses Rousseff of fiscal law violations, was backed by Brazil’s opposition parties.
Dozens of politicians, together with Cunha, have been implicated in Brazil’s largest ever corruption investigation right into a worth-fixing and political kickback scheme on the state oil firm.
A special cross-party committee will now be set up to analyze the impeachment request before the president can officially respond.
“The chances of her opponents impeaching Rousseff are pretty good because she has lost a lot of allies”, said David Fleischer, politics professor emeritus at the University of Brasilia.
Under Brazil’s impeachment procedures, a committee is formed to consider the allegations, which are then voted on by the Chamber of Deputies. She is accused of breaking the law by taking unauthorized loans from state banks to cover government spending and also continuing this practice in 2015 at the start of her second term.
Cunha announced his decision on the same day the PT said it would support the opening of a process in the lower house’s Ethics Committee that could lead to his removal as speaker.
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Shortly after the announcement, Ms Rousseff made a short, televised statement to insist on her innocence.
