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Jun 27, 2017 | 17:18 GMT

Brazil: Another Corruption Case Will Sidetrack Congress

(Stratfor)

Brazilian President Michel Temer's legal troubles have reached a new peak. On June 26, General Prosecutor Rodrigo Janot formally charged Temer with having received bribes from Brazilian food conglomerate JBS. Now, Brazil's Supreme Federal Court must request congressional authorization to try Temer, meaning that two-thirds of the Chamber of Deputies, the lower house of the Brazilian National Congress, would need to approve of starting the impeachment process against Temer. And with 513 members in the lower house, that means Temer would need 172 votes to block the process.

As of now, Temer supposedly has the support of over 250 voters — more than enough to block an impeachment process. But there have been signs of discontent within the ruling coalition, and some lawmakers have threatened to abandon the government. The corruption charge is just the first in a series of several formal charges that Janot will request against Temer. And for each of these requests, the National Congress will have to vote on whether or not to allow the Supreme Court to try Temer.

If the Chamber of Deputies allows the court to put Temer on trial, the president of the lower house, Rodrigo Maia, would temporarily assume the Brazilian presidency and call an indirect election for president 30 days later. The National Congress would then choose Temer's successor. Rumored choices include Maia himself; Gilmar Mendes, the high court's chief justice; Nelson Jobim, a former defense minister; and Sen. Tasso Jereissati. None of these contenders would significantly deviate from Temer's policy priorities, and his successor would serve more as a caretaker of the presidency until the October 2018 presidential election.

The charges against Temer will cause political gridlock in Brazil for at least the next two months, as the Congress becomes preoccupied with how to handle them. And the government's economic reform agenda will almost certainly suffer. Lawmakers were expected to approve labor reform legislation in July and possibly vote on a pension reform meaure in the second half of 2017. The latter is particularly crucial, since Brazil's pension system reported a deficit of around $48 billion in 2016, or about 2.4 percent of the country's gross domestic product.  However, recent events will surely delay the approval of any reforms.

Another major consequence of the charges against Temer will be increased street protests by opposition members demanding an early election, especially by supporters of former president Luiz Inacio Lula da Silva. Da Silva is the 2018 presidential candidate for Brazil's Workers' Party, and according to a June 26 poll released by Datafolha, he is the favorite right now to win the office. However, da Silva is also on trial on corruption charges, and a conviction before the 2018 election would prevent him from running. If the 2018 vote were to be moved up, da Silva could run for president before a final ruling is issued. And in the wake of Temer's recent charges, his supporters are eager to make that happen.

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