MercoPress. South Atlantic News Agency

Brazilian ruling coalition members sign letter pledging to support austerity package

Rousseff's unruly coalition pledged in a letter to support her austerity package, a deal brokered by Vice President Michel Temer as the link between Executive and congress

Brazilian congressional leaders within President Dilma Rousseff's coalition signed a joint letter on Wednesday pledging to support her austerity package, an unexpected sign that the ties with her unruly coalition are improving. The deal was brokered by Vice President Michel Temer on his first day as the official go-between tasked with mending Rousseff's tense relations with coalition lawmakers.

Temer chairs the PMDB party, which controls both houses of Brazil's Congress. Allegedly the vice-president was not invited to the task but rather 'implored' by Rousseff to accept, according to congressional sources, which he accepted given the political stalemate and despite a distanced personal situation.

After the letter was distributed to journalists in Congress, Brazil's currency, the Real, firmed to a one-month high of 3.05 per dollar. The benchmark Bovespa stock index rose 0.53 percent to a four-month high.

Rousseff has sought austerity measures in order to cut Brazil's fiscal deficit and maintain the country's investment-grade credit rating.

“We, the below-signed party presidents and leaders of the ruling coalition in the Senate and Chamber of Deputies, support the efforts for fiscal balance and stability,” the letter said.

The endorsement of Rousseff's fiscal austerity push follows months of successive defeats in Congress since her re-election in October. Roughly nine out of 10 Brazilians disapprove of recent interest rate and tax hikes, according to a nationwide poll earlier this month.

The congressmen said Rousseff's proposals, which include raising payroll taxes and cutting labor benefits, could face changes but any initiatives to raise spending or reduce tax revenues would be blocked.

“The allies need to reunify around the government's projects,” Temer told reporters.

However the leader of the opposition Aecio Neves claimed that Rousseff had in fact made a 'white gloves' resignation of her presidential duties, since financial and economic affairs have been left in the hands of Finance minister Joaquim Levy, and the political issues handed to Temer.

Levy is implementing policies which are the exact opposite of what Rousseff preached during her previous four years, and is also considering a redesign of the oil industry opening the sector to foreign investors since “a rusted and obsolete” Petrobras has been unable to achieve what it was mandated, claimed Senator Neves and who just lost to Rousseff in the runoff of the presidential election last October.

“Levy manages the numbers, Temer the politics, so what is left for Rousseff, who is the president?” asked Neves who insisted the Brazilian electorate was cheated with the repeated promises and assurances from the president and her political mentor Lula da Silva, that “the economy was doing fine, never better”.