In Latest Shocking Twist, Brazil Impeachment Back On Track After Lawmaker Revokes His Own Annulment Call

Another day, another stunning reversal in Brazil's neverending Rousseff impeachment saga.

Just hours after Brazilian stocks and currency tumbled when the head of Brazil's lower house Waldir Maranhao said he would annul the soon to be former president's impeachment process, the drive to oust President Dilma Rousseff is once again back on track after Maranhao reversed a decision that had earlier threatened to throw the entire impeachment process into chaos.

As Bloomberg reports, lawmaker Waldir Maranhao released a statement in the dead of night revoking his own call to annul impeachment sessions in the lower house. Reuters adds that in his official statement to the Senate, Maranhao did not cite any reason for backtracking on his surprise announcement on Monday to annul last month's lower house vote to recommend the Senate try Rousseff for breaking budgetary laws although one can assume that it carried a substantial price tag.

Rousseff’s allies spent most of Monday trying to capitalize on the lower house leader’s call to annul last month’s impeachment vote in the lower house. Attorney General Jose Eduardo Cardozo said the administration could file an appeal with the Supreme Court by arguing that Maranhao was right in trying to halt the process. Earlier, Maranhao argued that lower house deputies shouldn’t have announced their intention ahead of the April 17 vote to send the motion on to the Senate.

Then, Maranhao reversed that call.

"I revoke my decision issued May 9, 2016, in which the lower house sessions were annulled,” Maranhao was cited as saying in a statement released by his office. He did not elaborate.

Senate President Renan Calheiros on Monday said Maranhao was "playing with democracy" and that the Senate would press ahead with a Wednesday vote on whether to suspend Rousseff for up to six months pending a trial.

The reversal to the reversal puts the Senate back in the spotlight, with a vote on whether to put the unpopular president on trial still slated for Wednesday. If successful, it would temporarily remove her from office.

As we reported yesterday, the shocking twist jolted investors and underscored the intensity of a power struggle that is sure to heat up even further in coming days. Since proceedings began in Congress late last year, legislators have engaged in shoving matches over procedural debates and Rousseff has accused her vice president of plotting a coup against her. The Supreme Court has also been forced to step in on several occasions to clarify legal questions and further involvement by the highest court can’t be ruled out.

Meanwhile the social mood is turning uglier by the second: TV footage showed anti-impeachment protesters burning tires to stop the traffic in some of Sao Paulo’s main roads, including that leading to the international airport. At the same time, government supporters have scheduled more protests for the next few days.

"Even the best laws aren’t good enough for the scale of this battle," said Carlos Pio, a professor of politics at the University of Brasilia. "The impeachment process will continue and with it the noise, challenges and uncertainty that we’ve been seeing."

For now, however, all those who were stopped out of their Brazilian exposure are back and bullish once again, perfectly oblivious of Brazil's depressionary fundamentals. Trading in Europe signaled Brazilian markets were poised to rebound. The Lyxor ETF Brazil, an exchange-traded fund, rose more than 3 percent in Paris. Brazil’s Ibovespa index of stocks slipped 1.4 percent Monday, trimming gains that have made it the second best-performing stock market in the world this year.

Bloomberg adds that some questioned the motives of Maranhao, a little-known politician from the country’s northeast who himself is under investigation for corruption. The president seemed taken aback by his announcement and urged caution during a speech earlier in the day. She was likely taken even more aback by his abrupt U-turn.

And now that attention shifts to the next impeachment step, all eyes will be on the Brazilian senate where the vote is expected to pass. Senate President Renan Calheiros said the impeachment vote could occur after 7 p.m. local time on Wednesday. Legislators from the opposition cheered while supporters of the government stood up and shouted at the senator in protest.

Here is a brief recap from Bloomberg on how the senate impeachment process works

  • With a tally of 15 against 5, a Senate committee backed a report saying there is enough evidence to try Rousseff
  • Senate will vote on report and needs simple majority of 41 votes to start official impeachment hearings
  • If they win, Rousseff will temporarily step aside and Vice President Michel Temer takes over
  • Her mandate will be terminated if the opposition win a subsequent vote by a two thirds majority