Brazil's largest party not bolting Rousseff government

Reuters News
Posted: Aug 21, 2015 7:54 AM

By Maria Carolina Marcello

BRASILIA (Reuters) - Brazilian Vice President Michel Temer, a key ally of embattled President Dilma Rousseff, might end his role managing her unwieldy coalition in Congress but he is not planning to leave her government, members of his party said on Friday.

"The vice president has not taken any decision on quitting the political liaison role," a spokesman for Temer told Reuters.

Valor Econômico newspaper reported on Friday that the Brazilian Democratic Movement Party, or PMDB, which is Brazil's largest party and controls both houses of Congress, is preparing to leave Rousseff's government due to disagreements over handling an ongoing political crisis.

The newspaper said the PMDB would take a first step in that direction when Temer surrenders his tasks as Rousseff's political liaison with Congress by the end of August.

A formal departure from the government would take place on Nov. 15, when the PMDB holds a national congress, Valor said.

The loss of her main ally in her 17-party coalition could leave the unpopular Rousseff unable to govern Brazil.

Opinion polls show two of every three Brazilians want to see Rousseff impeached because of a severe economic downturn and a massive corruption scandal over political kickbacks on contracts with state-controlled companies.

PMDB officials told Reuters the party will leave Rousseff's governing coalition at some point because it plans to field its own presidential candidate in 2018, but that they were not considering abandoning Rousseff at this time.

"Michel (Temer) will not do anything that puts the government in difficulties. He has not said anything about ending his political liaison role," the PMDB's leader in the Senate, Eunicio Oliveira, said in an interview.

"We all have a duty to help Brazil out of this crisis."

In recent months, Temer has spearheaded efforts to push through austerity legislation to cut a fiscal deficit that has put Brazil's investment grade credit rating at risk.

His role has been key in restoring credibility in the Rousseff administration's policies among the business community.

Sources in the PMDB told Reuters that Temer was tired of dealing with the infighting in the government over the distribution of second-tier positions to keep its allies happy.

Differences also arose this week between the PMDB and Finance Minister Joaquim Levy when he opposed sparing the transport sector from a roll back in payroll tax breaks, a move aimed at restoring fiscal revenues, the sources said.

(Additional reporting by Guillermo Parra-Bernal and Anthony Boadle; editing by Lisa Von Ahn, Bernard Orr)