Brazilian President Dilma Rousseff received a major blow to her leadership on 7 October when a federal audit court in the country ruled that her government violated Brazil's fiscal responsibility law by disguising a widening fiscal deficit as she campaigned for re-election. The ruling has given her staunch opponent lawmakers what they need to push for impeachment proceedings against her.
The court noted that the government's borrowing from public banks Banco do Brasil and Caixa Econômica Federal to pay for social programmes, such as family grant and unemployment insurance, resulted in budgetary shortfalls. This type of loan is forbidden by the fiscal responsibility law, because it is considered a way to manipulate public accounts. On top of that Rousseff has also delayed these payments to the banks. The mishandled or over-exceeded amount sought by Rouseff from these banks is close to R$100bn ($26bn, £17bn).
Although the order is not legally binding on impeachment proceedings, it can be used as fair reasoning to weaken her support in Congress. Opposition leaders welcomed the decision and may aggressively demand for an impeachment vote against her if they have the minimum support required for such a procedure.
"The ruling establishes that the government doctored fiscal accounts, which is an administrative crime, and President Rousseff should face an impeachment vote," said Carlos Sampaio, leader of the opposition PSDB party in Brazil's lower house. Attorney General Luis Inacio Adams, however, said the government would appeal again to the supreme court to overthrow the audit decision.
Rousseff's popularity since she began her second term has plummeted as the country's economy has reached new lows, with GDP barely growing in 2014. The inflation rate has risen to more than twice the central bank's 4.5% target and unemployment has increased. The International Monetary Fund (IMF) last week also predicted a 3% shrinkage in Brazil's economy this year, with a further 1% in 2016, reflecting deepening trouble for the country. Further, on 6 October, Brazil's top electoral authority, the Supreme Electoral Court, had said that it would re-open an investigation into alleged misuse of funds during Rousseff's re-election campaign to see if donations were drawn from illegal sources.
First it was economic failure, then it was corruption allegations that put pressure on the president, but now public's support at large seems to be dwindling as well. A petition on campaigning website Avaaz in February had called for the impeachment of the president and it received around 2 million signatures. In a recent survey by Datafolha 71% said they are dissatisfied with the government, and 66% said given a chance they would support Rousseff's impeachment.