Rousseff and her finance minister Guido Mantega ordered a R$50bn (US$32bn) cut in the 2011 budget in February, with a fair chunk of the adjustment (some US$10.7bn) slated to come from the emendas. There is also an executive stay on the restos a pagar – outstanding budget appropriations hanging over from the Lula era – amounting to some R$28bn (US$17.4bn). Lula was happy to spread ‘peace and love’ amongst the coalition partners to keep them onboard ahead of Rousseff’s 2010 election, and now the 13 smaller parties that make up the coalition along with the PT and the PMDB are intent on calling in those favours. The importance of the PMDB can be explained by the fact that it has never been out of power since the return to democracy in 1985. Although it is a loose political group, led mainly by regional power barons (who act as presidential kingmakers), the party is now looking very united in congress, under the astute tutelage of Vice-President Michel Temer, who has taken leave of absence from his lengthy party leadership in order to sit in the Rousseff government. It is worth noting that it has been the PMDB, and not the main opposition Partido da Social Democracia Brasileira (PSDB), that has ultimately handed Rousseff her main defeats in congress so far – it lent its support to the recent controversial parliamentary reforms of the country’s forestry code and it also withdrew its support for Palocci as soon it became clear his political power was waning. In the 2010 elections the PMDB held onto its position as the largest party in the senate (with 19 seats). In February it formed a ‘superbloc’ in the lower chamber with four other coalition parties – the Partido da República, the Partido Progressista, the Partido Trabalhista Brasileiro and the Partido Socialista Cristão – creating an alliance of 202 federal deputies, surpassing the PT’s 88 elected deputies. Thus it has all the ammunition to be Rousseff’s main challenger – and it will not be shy of using it ahead of the local elections.
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