It’s a bittersweet day for democracy: while some celebrate the prevalence of the judicial system and democratic checks and balances, others mourn the loss of a popular leader that, some say, was unjustly removed from her position in a move repeatedly characterized as a coup d’état.
Dilma Rousseff, Brazil’s former President, was permanently removed from office on Wednesday, after the Senate voted 61-20 to convict her on budgetary violations. Rousseff used money from state banks to illegally fund increased public spending, the legislative body concluded.
The former President has denied any wrongdoing, arguing this was a political move aimed at protecting the economic interests of the country’s richest. Her lawyer added that they would appeal the decision through the Supreme Court. In a separate hearing, the legislators voted not to bar Rousseff from public office for eight years.
The nine-month long impasse that paralyzed Latin America’s largest economy, as well as the 13-year long rule of the left-wing Workers Party, has come to and end. Conservative Vice President Michel Temer was sworn to the Presidency. He has promised to revitalize the economy while implementing austerity measures to tackle the long-standing budgetary deficit.
However, his "ability to win parliamentary support for his fiscal reforms" will now be put to test, according to Nicholas Spiro, a partner at London-based Lauressa Advisory.
"Many analysts say Mr. Temer has a very limited window of opportunity to convince financial markets and fellow politicians that he can pass tough austerity measures to set Brazil back on course," Wall Street Journal added.
The WisdomTree Brazilian Real Strategy Fund BZF, ProShares UltraShort MSCI Brazil Capped BZQ and Brazilian Real are up already. Shares of the iShares MSCI Brazil Index (ETF) EWZ and the Bovespa Index are considerably down.
Shares of Petroleo Brasileiro SA Petrobras (ADR) PBR, a company that was closely related to the corruption scandals around Rousseff, were down almost 4 percent.
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