The Petrobras bribery scandal that has dogged Brazil's politics for some years shows no sign of flagging. Prosecutors are expected shortly to unveil new allegations about the state-controlled oil company, while on the streets of the country's main cities hundreds of thousands have been rallying, demanding the head of President Dilma Rousseff, re-elected barely 10 months ago. Last weekend saw the third round of mass protests this year and 10 days ago Rousseff's ruling coalition, led by her Workers Party, was weakened by the desertion of two allied parties .
Rousseff’s problems are compounded by the likelihood that the economy will decline both this year and next. Rising unemployment, a credit rating flirting with junk status, and inflation, all presage the worst economic downturn since at least 1990.The Brazilian real is at a 12-year low against the dollar. Her own poll figures are in single digits – she is the most unpopular president since the return of democracy in 1985.
The Petrobras scandal – kickbacks for massive state contracts – dates back to Rousseff’s time as chair of the company’s board before she won the presidency in 2010, although neither she nor her predecessor and mentor Luiz Inacio Lula da Silva have yet been directly implicated. She also faces legal challenges over whether her campaign received illicit contributions and if her government improperly used money from state banks to cover budget shortfalls. She insists she will not resign, but the demand for impeachment has grown to the point that two in three Brazilians support it, most strongly among the poorest and least educated; her party’s natural support base.
But there are some straws in the wind that the president can clutch at. Some reports say the mood of the protests were more subdued than before – pressure may be easing. And the president had measured success last week in consolidating support among restive Senate leaders for a pro-business agenda. Its president Renan Calheiros, warns the president’s removal by congress would “set the country on fire”.