The WSj writes on Dilma Rousseff’s second inaugural. Brazil Leader Starts Term on Shaky Ground
President Dilma Rousseff Promised to Fight Corruption and Fix the Economy During Her Inauguration
After being in office for four years, the numbers are not good:
In an inauguration ceremony that was upbeat but drew sparse applause and little spontaneous celebration by her supporters, Ms. Rousseff extolled her legacy of poverty reduction while outlining a vision to get Latin America’s largest economy back on track.
“We will prove that it is possible to make adjustments to the economy without repealing rights that have been won or betray social commitments,” she said in a speech in Brazil’s Congress attended by cabinet members, foreign dignitaries, allied lawmakers and other officials.
Her pledge came as Brazil confronts flat growth, stubbornly high inflation, ballooning debt and a potentially explosive corruption scandal at state-controlled oil giant Petróleo Brasileiro SA, or Petrobras.
Petrobras is key:
But the darkest cloud on the horizon for Ms. Rousseff might be the fast-moving corruption scandal at Petrobras.
Brazilian prosecutors allege that executives at Petrobras conspired with construction companies to inflate the cost of contracts, skimming off as much as $1.5 billion, by the estimate of Brazil’s budget watchdog, to enrich themselves while funneling kickbacks to Ms. Rousseff’s Workers’ Party and its allies.
Ms. Rousseff hasn’t been implicated in the scandal, and leaders of her party have repeatedly denied allegations of involvement. Police have already filed charges against 36 suspects, including two former Petrobras officials.
There are two things to bear in mind:
1. The enormous amounts of money handled through Petrobras (and the temptation/opportunities for corruption)
2. Brazil’s antecedents when it comes to scandals and prosecutions
Blast from the past: The Economist explains What is Brazil’s “mensalão”?