Who stands to gain from Dilma Rousseff’s impeachment?

On 17^th April, the lower house of the Brazilian Congress voted in overwhelming numbers to impeach President Dilma Rousseff. Now the Senate is likely to take up the impeachment, forcing Rousseff to step aside for up to 180 days while Vice President Michel Temer assumes the presidency. This unprecedented development could mean the end of 14 years of rule by Rousseff's Workers’ Party (Partido dos Trabalhadores or PT). But who would form the next government if Rousseff is forced to resign is unclear. When Rousseff’s predecessor Luiz Inácio “Lula” da Silva won the presidency in 2002, it was a historic victory, proof that Brazilian democracy could accommodate the coming to power of a leftist party. Lula managed to win re-election in 2006. His policies of raising the minimum wage, expanding social programmes and increasing access to credit, training, and higher education significantly reduced the number of Brazilians living below the poverty line. It also realigned the PT’s base of support away from the middle class towards voters in the bottom half of the income distribution, with especially impressive majorities in the poorest region of the country, the northeast. Near the end of his second term, Lula decided that his successor would be his chief of staff, Dilma Rousseff, who had no previous electoral experience. In a move that demonstrated his personal dominance over his party, he insisted on her candidacy, and the Workers’ Party confirmed it in an uncontested internal election. Rousseff won the 2010 presidential election fairly easily, the third consecutive PT victory. Her re-election in 2014 was more closely contested. Rousseff’s relations with Congress deteriorated early in her second term. The PT has always had to rule in coalition with other parties. Its key ally is the ideologically and programmatically amorphous Brazilian Democratic Movement Party (PMDB), whose most important leader is Michel Temer. In February 2015, PMDB member Eduardo Cunha won the election to the presidency of the lower house of Congress, a position that puts him third in line to the presidency. Cunha is on the right-wing and opposes Rousseff. He has also been caught up in the Petrobras scandal, a massive corruption case that has touched many top politicians, including Lula. Cunha unleashed impeachment proceedings against Rousseff in December 2015 after the Attorney General presented a corruption case against him in the Supreme Court. Rousseff will be impeached if two thirds of the Senate, or 54 Senators, vote in favour. If she survives, street protests against her are likely to continue, and Congress would be barely more co-operative than it has been up to now. She would probably only be able to continue as president by agreeing to a de facto abdication, letting Lula manage relations with Congress, and offering up ministries and budgetary concessions to small allied parties. Forging an economic policy that would lift the country out of the most prolonged recession in 85 years would be unlikely under these circumstances. If Rousseff is impeached and Vice President Michel Temer takes over, he would also face a difficult presidency. Markets might rally initially, but would be unlikely to wait out what will be a slow rate of reform. Temer is under suspicion of corruption himself, and opinion polls indicate that his approval ratings are not much higher than Rousseff's. For Cunha, Rousseff's departure would be a victory, but one that might not stave off loss of his Congressional seat and criminal prosecution. At present, he still has a path to the presidency, because the Supreme Court has ruled that the lower house should initiate proceedings against Temer for the same creative accounting for which Rousseff is being impeached. For Lula, the impeachment of his protégé is an opportunity for redemption. The Petrobras scandal has already tarnished his legacy. If Rousseff were to go, Lula could mount a campaign for president in 2018 as a member of the opposition, blaming the Temer government for the economy’s ills and promising to right an injustice committed against his party, his supporters, and the former president. Lula’s return to the presidency is unlikely, but Rousseff's fall is his best chance of getting back into power.