BRASILIA (Reuters) – Brazilian President Dilma Rousseff will decide the fate of her embattled sports minister after meeting with him on Friday to discuss the corruption allegations against him, a government source said.

“She wants to meet with him personally before deciding,” said the source, who was well informed on the matter but not authorized to discuss it publicly.

Her agenda shows no meeting between the two but another source in the president’s office said it could happen late afternoon or evening.

Orlando Silva is accused of arranging up to 40 million reais ($23 million) in kickbacks from government contracts to benefit himself and the Communist Party of Brazil, which is part of Rousseff’s governing coalition.

The scandal threatens to further complicate already troubled preparations for the 2014 soccer World Cup and the 2016 Olympics, which Brazil hopes will showcase its emergence as an economic power.

Rousseff met with senior aides on Thursday night to review the allegations against Silva after returning from an official trip to Africa, according to the government source.

Local newspaper Estado de S.Paulo reported on Friday that the president had made up her mind after that meeting to replace Silva with another member of his party.

BRASILIA, Oct 18 (Reuters) – Brazil’s sports minister came under growing pressure to resign on Tuesday as more evidence emerged of wrongdoing at his ministry in a corruption scandal that raises doubts abpit preparations for the next World Cup.

Orlando Silva is accused of arranging up to 40 million reais ($23 million) in kickbacks from government contracts to benefit himself and the Communist Party, which is part of President Dilma Rousseff’s government.

The influential news magazine Veja reported during the weekend that Silva headed a scheme dating back to 2004 in which 20 percent kickbacks were charged on public contracts, including sports projects for needy children.

Despite Silva’s emphatic denials of wrongdoing, he looked increasingly vulnerable on Tuesday as details emerged of sloppy bookkeeping and favoritism in the Sports Ministry’s contracts with non-governmental organizations, or NGOs.

Silva was due to testify on the matter in Congress later on Tuesday.

A government watchdog, known by its Portuguese acronym CGU, says 59 contracts signed by the Sports Ministry between 2006 and 2011 did not comply with regulations, according to local media reports. It has demanded that contractors return 24.5 million reais.

“The minister must leave,” the Estado de Sao Paulo newspaper said in an editorial.

BRASILIA (Reuters)- Brazilian President Dilma Rousseff faces another corruption scandal in her cabinet over accusations the sports minister arranged for millions in kickbacks, raising questions about the country’s credentials to host the World Cup and Olympics.

The accusations, made in the influential weekly magazine Veja over the weekend, are an untimely blow for Rousseff, as her administration appeared to be moving on from scandals that brought down five ministers in recent months.

The involvement of Sports Minister Orlando Silva is particularly sensitive for her government, which is struggling with a ballooning budget for the 2014 soccer World Cup and allegations of widespread padding of public works projects for the event. Brazil is also preparing to host the 2016 Olympic Games in Rio de Janeiro.

Silva, the government’s point man for investment and infrastructure projects for the mega events, denied the accusations as “farcical” and rushed back from a visit to the Pan-American Games in Mexico to defend himself.

“The information published at the weekend simply is not true,” he said in a news conference on Monday, adding that he would testify in Congress on Tuesday about the accusations.

Rousseff said she still backed Silva, the only cabinet member from Brazil’s Communist Party, which is a part of the governing coalition.

“We not only assume the integrity of minister (Silva), but he also expressed extreme outrage over the accusations made against him,” Rousseff told reporters in Pretoria, South Africa, the first stop on a week-long African trip.

BRASILIA/RIO DE JANEIRO (Reuters) – Brazil’s government is racing to forge a deal in Congress this week that it hopes will prevent a lengthy legal and political battle over its huge offshore oil reserves.

Brazil’s states and cities have been quarreling for years over how to distribute the expected multi-trillion-dollar windfall from one of the world’s biggest recent oil finds. Former President Luiz Inacio Lula da Silva called the so-called “subsalt” fields, discovered in 2007, “a gift from God” that could make Brazil a rich country.

President Dilma Rousseff’s government is now trying to defuse the arguments by offering a cut of its own take in future royalties from the fields. Officials are confident Congress will approve the government proposal in coming days or weeks.

“We’re at ease. The interested sides are hard at work … and by the looks of it, they’re forging a quite significant majority,” Gilberto Carvalho, general-secretary of the president’s office, told Reuters.

Yet some leading politicians are still balking at the proposal or threatening legal action. The final outcome is up in the air at a time when Rousseff’s relationship with Congress has been poisoned by budget cuts and other problems.

At stake is Brazil’s plan to become one of the world’s largest suppliers of oil outside of OPEC and to ensure revenue to finance improvements in infrastructure, health programs and education, which are crucial to entering the ranks of developed nations.

The final outcome will have major implications for state oil company Petrobras (PETR4.SA: Quote, Profile, Research, Stock Buzz)(PBR.N: Quote, Profile, Research, Stock Buzz), and possibly for multinational energy companies such as Italy’s (ENI.MI: Quote, Profile, Research, Stock Buzz) and Norway’s Norsk Hydro (NHY.OL: Quote, Profile, Research, Stock Buzz), who have expressed interest in helping Brazil develop the fields.

BRASILIA/RIO DE JANEIRO, Oct 3 (Reuters) – Brazil’s government is racing to forge a deal in Congress this week that it hopes will prevent a lengthy legal and political battle over its huge offshore oil reserves.

Brazil’s states and cities have been quarreling for years over how to distribute the expected multi-trillion-dollar windfall from one of the world’s biggest recent oil finds. Former President Luiz Inacio Lula da Silva called the so-called “subsalt” fields, discovered in 2007, “a gift from God” that could make Brazil a rich country.

President Dilma Rousseff’s government is now trying to defuse the arguments by offering a cut of its own take in future royalties from the fields. Officials are confident Congress will approve the government proposal in coming days or weeks.

“We’re at ease. The interested sides are hard at work … and by the looks of it, they’re forging a quite significant majority,” Gilberto Carvalho, general-secretary of the president’s office, told Reuters.

Yet some leading politicians are still balking at the proposal or threatening legal action. The final outcome is up in the air at a time when Rousseff’s relationship with Congress has been poisoned by budget cuts and other problems.

At stake is Brazil’s plan to become one of the world’s largest suppliers of oil outside of OPEC and to ensure revenue to finance improvements in infrastructure, health programs and education, which are crucial to entering the ranks of developed nations.

The final outcome will have major implications for state oil company Petrobras (PETR4.SA: Quote, Profile, Research)(PBR.N: Quote, Profile, Research), and possibly for multinational energy companies such as Italy’s (ENI.MI: Quote, Profile, Research) and Norway’s Norsk Hydro (NHY.OL: Quote, Profile, Research), who have expressed interest in helping Brazil develop the fields. ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

BRASILIA, Oct 3 (Reuters) – President Dilma Rousseff’s biggest challenge in coming months will be to deal with growing discontent over persistent inflation and austerity measures as the fallout from global financial turmoil hits Latin America’s largest economy.

Rousseff will have to face rebellious allies wanting more government spending and a greater say in policies as well as unions demanding higher wages. Other challenges include rising inflation, currency volatility, and resistance to long-term structural reforms.

A FADING ECONOMY

Compared to many developed countries, Brazil’s expected 3.5 percent economic growth this year looks attractive. But after the boom under former President Luiz Inacio Lula da Silva, that culminated in last year’s dizzying expansion of 7.5 percent, it feels disappointing.

Bank and postal workers striking for higher wages to offset inflation are the latest groups to become unhappy with the course of the economy. While cheap credit and rising real wages fueled the consumption boom under Lula, real wages have fallen marginally and lending rates are sharply higher since Rousseff took office on Jan. 1. That has fueled discontent in the rising middle class that forms the cornerstone of her support base.

Rousseff’s disapproval rating doubled to 25 percent in July but eased to 21 percent in September, an Ibope opinion survey showed. Rousseff performed worst on health care and easing the country’s high tax burden.

To prevent pessimism from spreading, Rousseff stepped up ribbon-cutting events designed to showcase improvements in public services and social welfare. Her aides privately say they expect worse economic data in the third quarter.

BRASILIA (Reuters) – Brazil plans to tap foreign debt markets before year-end despite the global financial turmoil, the country’s treasury secretary told Reuters.

The worsening global outlook has caught up with Latin America’s largest economy this month, battering Brazil’s equity and currency markets. The central bank also revised its 2011 growth projections downward to 3.5 percent this week.

Still, the government expects the debt sale to showcase Brazil’s strong fundamentals at a time when many fear the global economy could slip back into recession.

“The fact we’re in a crisis reinforces the importance for Brazil to prove its fundamentals,” Arno Augustin said in an interview on Friday in Brasilia.

The yield spread, or difference, between 5-year Brazilian global bonds and 5-year U.S. Treasuries fell to 214.8 basis points on Friday from a two-year high of 221.9 basis points on Sept. 23, a sign that Brazilian debt is being considered less risky compared with U.S. debt than it was previously.

IT’S ALL ABOUT THE CURVE

Brazil’s objective was not to raise capital or to capture foreign currency, but to broaden Brazil’s yield curve, Augustin said.

BRASILIA (Reuters) – They were the big winners in Brazil’s economic boom: nearly 40 million people who joined the middle class since 2003 and went on a shopping spree, many of them buying televisions, cars or air conditioners for the first time.

Yet there are signs that some of these Brazilians — known here as the “new C Class” — are in danger of sliding back into poverty.

The consequences are potentially dire for President Dilma Rousseff, some of Brazil’s major companies, and an economy that has in recent years been one of the world’s few powerful engines of growth.

There are several causes behind the incipient reversal of fortune, including an economy slowing in tandem with the rest of the world, rising inflation and high household debt.

While it inherited the problems, Rousseff’s government has struggled to limit the fallout — and has arguably made some of them worse.

“If we don’t watch out, a worsening of the international scenario can cause a setback,” said Strategic Affairs Minister Wellington Moreira Franco, who is charged with coordinating long-term planning. “What we want is a type of brake to prevent these Brazilians from falling back into poverty.”

That “brake” could take several forms, and Rousseff and senior economic officials have repeatedly said they have policy tools available to protect the gains of recent years.

BRASILIA (Reuters) – They were the big winners in Brazil’s economic boom: nearly 40 million people who joined the middle class since 2003 and went on a shopping spree, many of them buying televisions, cars or air conditioners for the first time.

Yet there are signs that some of these Brazilians — known here as the “new C Class” — are in danger of sliding back into poverty.

The consequences are potentially dire for President Dilma Rousseff, some of Brazil’s major companies, and an economy that has in recent years been one of the world’s few powerful engines of growth.

There are several causes behind the incipient reversal of fortune, including an economy slowing in tandem with the rest of the world, rising inflation and high household debt.

While it inherited the problems, Rousseff’s government has struggled to limit the fallout — and has arguably made some of them worse.

“If we don’t watch out, a worsening of the international scenario can cause a setback,” said Strategic Affairs Minister Wellington Moreira Franco, who is charged with coordinating long-term planning. “What we want is a type of brake to prevent these Brazilians from falling back into poverty.”

That “brake” could take several forms, and Rousseff and senior economic officials have repeatedly said they have policy tools available to protect the gains of recent years.

BRASILIA, Sept 21 (Reuters) – Brazil’s lower house of Congress on Wednesday rejected a government proposal to create a new tax on financial transactions to pay for healthcare, raising questions about President Dilma Rousseff’s ability to maintain her program of fiscal austerity.

The government’s defeat signals growing pressure for the administration to increase spending on public services without raising taxes, already among some of the highest in the world.

It also shows that Rousseff has not yet managed to patch up relations with her main allies, after months of political turmoil.

Despite her large nominal majority in Congress, the bill was defeated by a vote of 355 to 76, with 4 abstentions.

None of the parties in Rousseff’s broad coalition backed the proposal, except for her own Workers’ Party.

The political crisis in Brazil included last week’s resignation of Tourism Minister Pedro Novais, the fifth cabinet member to depart in just over three months. Austerity measures and a series of corruption scandals had rattled the ruling coalition and caused allies to openly boycott Rousseff’s legislative agenda.

Investors are paying particularly close attention to the government’s budget after the central bank’s surprise interest rate cut in late August. [ID:nE5E7IM05G]