In a rowdy hearing last Sunday, the lower house of Brazil’s Congress voted to move forward with impeachment proceedings against president Dilma Roussef. Financial markets had a mixed response as enthusiasm for potential new economic policies was tempered by the reality that there are no short-term solutions for Brazil's dire economic situation. Meanwhile, the Rio Olympics experienced new setbacks when a brand new elevated bicycle path in the city collapsed, killing two people, and news broke that several Olympic construction projects may become the target of corruption investigations.
Rousseff remains defiant and has vowed to keep fighting. She has travelled to New York to a meeting of the United Nations and will likely make her case that she is the victim of a coup. In her absence, her Vice President and now political rival, Michel Temer, will take over the presidency temporarily. Meanwhile, a senator from the opposition has gone to Washington to send the opposite message: that the impeachment is proceeding according to the constitution.
Capital markets initially responded favorably to the impeachment news. However, enthusiasm for the potential implementation of new, more business-friendly economic policies has been tempered by the fact that a potential Temer presidency faces many obstacles; further, investors are starting to realize that there are no quick fixes for Brazil’s dire situation and economic malaise is likely to continue for quite a long time.
Part of a recently inaugurated elevated sea-side bike path in Rio de Janeiro collapsed yesterday, killing 2 people and injuring several others. Touted as one of the legacy infrastructure projects of the Olympics, a 50-meter stretch of the path was washed away by a huge wave.