President Temer’s victory over opposition calling for his resignation from the presidency due to the investigations for corruption may already be reported as certain, but this can be a Pyrrhic victory…
The political and economic price of the operation is incalculable. The main banner of the Temer administration was the Pension Reform (akin to the U.S. Social Security). This reform is really the most important in order to balance the government’s accounts – the pension system is responsible for about 60% of the administration’s deficit and it builds up each year causing a snowball effect.
To get rid of the corruption investigation process, Temer did not hesitate to deform the scope of the reform by forgiving agribusiness debt, which represents a major part of the total deficit.
As a negative balance of R$ 129 billion (US $41 billion) was already anticipated in the accounts for 2017, now this result could be much worse. The economic team led by Minister Meirelles still does not know what the damage will be, but he knows that the R$129 billion mark has already been surpassed. Observers estimate that the fiscal target and deficit could reach R$ 155 billion (US $49,5 billion).
Public opinion is keenly observing the parliamentarians who voted in favor of not investigating Temer. This may cost their political careers in the 2018 elections.