BRASILIA, Aug 18 (Reuters) – Brazilian President Dilma Rousseff reached out to political allies on Thursday to stem a growing rebellion within her coalition after the resignation of a fourth minister pushed the government deeper into crisis.

Agriculture Minister Wagner Rossi resigned on Wednesday following corruption allegations against his aides, ratcheting up tensions within the unwieldy ruling coalition and adding to a sense of disarray in Rousseff’s eight-month-old government.

The large PMDB party, of which Rossi is an influential member, and other coalition allies are angry at Rousseff’s drive to cut costs and root out corruption in ministries and is threatening to block her economic reform agenda in Congress.

Rossi’s resignation raised the risk of a damaging showdown between Rousseff and Congress, threatening to derail her attempts to control spending and pass reforms such as streamlining the tax code to help raise economic growth.

“No government can emerge unscathed from the dismissal of four ministers in eight months. The new ghost haunting (the presidential palace) is named instability,” said newspaper Folha de Sao Paulo in an editorial.

The crisis in Brasilia comes at a bad time for Brazil’s economy, which is showing clear signs of slowing after breakneck growth last year. Rousseff faces the tricky task of spurring growth while maintaining fiscal austerity that is crucial to keeping inflation under control.

ALOOF STYLE

BRASILIA (Reuters) – President Dilma Rousseff faces a damaging showdown with Congress that threatens to hurt Brazil’s growth prospects as she struggles to contain a rebellion over her drive to cut costs and root out corruption.

Since taking office on January 1, the no-nonsense former guerrilla has scorned the usual back-slapping and handouts that oil the wheels of Brazilian politics, depriving allies of influential posts and sticking to a tight spending budget.

But she is now under intense pressure to back down as coalition lawmakers threaten to paralyse planned reforms to boost growth in Latin America’s largest economy, which is showing clear signs of a slowdown after a boom in 2010.

Signs of a breakdown in relations with Congress grew this week. Several parties in the ruling coalition openly boycotted Rousseff’s bills after officials from various parties were shown on TV handcuffed during a police anti-corruption sweep at the tourism ministry. One small party, the Party of the Republic (PR), walked out of the coalition.

The leader of the main coalition PMDB party in the lower house, Henrique Eduardo Alves, said the government’s legislative agenda would be blocked until Congress received the “respect that we want.”

“The lack of clarity, of frankness, of respect for parliament can cause grave dissatisfaction,” he told reporters.

After a strong start in which she secured $30 billion (18 billion pounds) in spending cuts to dampen inflation pressures, Rousseff has been bogged down by a series of political crises that have resulted in the resignation of three cabinet ministers.

BRASILIA (Reuters) – President Dilma Rousseff has suffered a sharp fall in popularity as austerity measures and a series of political scandals dampen Brazilians’ high expectations, an opinion poll showed on Wednesday.

Rousseff’s approval rating dropped 6 percentage points to 67 percent, while the number of those who disapprove of her more than doubled to 25 percent, a survey by the Ibope polling firm showed.

“People had expectations that weren’t fulfilled,” said Flavio Castelo Branco, director of economic policy with the National Industry Confederation, which releases the poll.

Although Rousseff’s ratings remain relatively high, the sharp fall is an alarming sign and could mean the 63-year-old career civil servant will have less political capital to face growing economic and political troubles.

The center-left Rousseff may come under more pressure to ease budget cuts introduced earlier this year to help tame inflation. She could also be tempted to back off from an anti-corruption campaign that has angered coalition allies who lost influential positions.

Rousseff took office on January 1 amid high expectations, buoyed by a roaring economy and the huge success of her predecessor and patron, Luiz Inacio Lula da Silva.

But she has faced an increasingly tough economic environment, plagued by inflation and a slowdown in growth.

BRASILIA, Aug 10 (Reuters) – President Dilma Rousseff has suffered a sharp fall in popularity as austerity measures and a series of political scandals dampen Brazilians’ high expectations, an opinion poll showed on Wednesday.

Rousseff’s approval rating dropped 6 percentage points to 67 percent, while the number of those who disapprove of her more than doubled to 25 percent, a survey by the Ibope polling firm showed.

“People had expectations that weren’t fulfilled,” said Flavio Castelo Branco, director of economic policy with the National Industry Confederation, which releases the poll.

Although Rousseff’s ratings remain relatively high, the sharp fall is an alarming sign and could mean the 63-year-old career civil servant will have less political capital to face growing economic and political troubles.

The center-left Rousseff may come under more pressure to ease budget cuts introduced earlier this year to help tame inflation. She could also be tempted to back off from an anti-corruption campaign that has angered coalition allies who lost influential positions.

Rousseff took office on Jan. 1 amid high expectations, buoyed by a roaring economy and the huge success of her predecessor and patron, Luiz Inacio Lula da Silva.

But she has faced an increasingly tough economic environment, plagued by inflation and a slowdown in growth.

BRASILIA, Aug 2 (Reuters) – High-profile scandals in President Dilma Rousseff’s government have soured ties with her allies, stalling legislation in Congress and delaying key infrastructure projects before the 2014 World Cup.

Other risks include an apparent lack of interest in long-term structural reforms, pressure to heighten public spending, and renewed intervention in currency markets.

SCANDALS

A corruption scandal that forced the top ranks of the transport ministry to resign is delaying the construction of roads, ports and railways that form part of Rousseff’s flagship public works program, PAC. [ID:nN1E7651GA].

This could have a broad impact in the real economy, affecting soy exporters facing shipping delays due to poor roads or IT manufacturers waiting for fiber optic cables to launch the assembly of new tablet plants.

The latest accusations of kickback schemes will likely also slow other infrastructure projects, including preparations for the World Cup in 2014 and the 2016 Olympics, as government watchdogs step up scrutiny of contracts.

“We’re reviewing all the projects in the transport ministry – with a strong magnifying glass,” Transport Minister Paulo Passos said.

BRASILIA/SAO PAULO, Aug 2 (Reuters) – Brazil’s government will offer billions of dollars in new financing and some limited tax breaks to factories that are struggling with an overvalued currency and signs of a broader slowdown in Latin America’s biggest economy.

The measures, unveiled by the government on Tuesday, seek to fix a potentially dangerous economic imbalance in Brazil, where credit and commodity exports continue to boom but many local industries are seeing output shrink at a worrying pace as imports pour in from abroad, especially from China.

The plan includes an unspecified cut in payroll taxes for targeted sectors including shoes, furniture and software, the trade and industry ministry said in a statement.

Senior officials are due to provide further details of the plan later on Tuesday.

The measures appear to be a compromise between industrial leaders who clamored for massive tax breaks, and fiscal hawks within President Dilma Rousseff’s government who are worried about inflation and did not want to trigger a large increase in the budget deficit.

The announcement coincided with data showing that industrial production fell more than expected in June, down 1.6 percent from the previous month. Manufacturing output in Brazil has been mostly flat for more than a year now despite a robust economic expansion. [ID:nN1E77106Y]

To help provide financing for manufacturers, the government said it would extend an existing 75 billion reais ($48 billion) credit line to the BNDES state development bank to the end of next year — a move that could prove controversial.

BRASILIA, Aug 24 (Reuters) – The Brazilian government has tightened restrictions on unfettered land purchases by foreigners, authorities said on Tuesday, renewing concerns among investors.

Brazil is one of the world’s leading food producers.

The government has decided to close a legal loophole that had permitted foreign interests to circumvent existing restrictions by creating a Brazil-based company, the attorney-general’s office said.

The ruling means foreign companies, even if acting through a subsidiary in Brazil, cannot buy more than 50 modules, which totals from 250 hectares (620 acres) to over 5,000 hectares (12,350 acres), depending on the region.

The move does not apply retroactively to existing properties.

Under the new interpretation of a 1971 law, foreign land purchases must also be logged at registrars and communicated to the ministry of land development, the AGU said.

“The legal finding is immediately binding,” Attorney-General Luis Inacio Lucena Adams told a news conference on Tuesday.

BRASILIA, Aug 17 (Reuters) – Brazil’s presidential contenders took to the airwaves on Tuesday with free advertisements in what may be opposition candidate Jose Serra’s last chance to reverse a rapid slide in opinion polls.

The ruling party’s Dilma Rousseff raced to her biggest lead yet on Tuesday as a new poll showed her 16 percentage points ahead of Serra. It was the third poll in less than a week showing her with a decisive lead ahead of the Oct 3 vote, raising the chances she can avoid a second, run-off vote at the end of October. If she wins, she will become Brazil’s first woman president.

In a country where print media and Internet have a relatively low penetration, both sides believe the free TV and radio advertising that began on Tuesday can help them.

The TV exposure will introduce Rousseff to the 9 percent of voters who have still not heard of her and the nearly one-quarter who are not aware she is backed by hugely popular President Luiz Inacio Lula da Silva.

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For a factbox on the TV campaign click [ID:nN13177572]

For a graphic on recent polls click:

BRASILIA, Aug 17 (Reuters) – Brazil’s presidential contenders took to the airwaves on Tuesday in what may be opposition candidate Jose Serra’s last chance to reverse a rapid slide in opinion polls.

The ruling party’s Dilma Rousseff raced to her biggest poll lead yet this week ahead of the Oct. 3 vote, raising the odds she could become Brazil’s first woman president without a second, run-off vote at the end of October. [ID:nN1696647].

In a country where print media and Internet have a relatively low penetration, both sides believe the free TV and radio advertising that began on Tuesday can lift them.

The TV exposure will introduce Rousseff to the nine percent of voters who have still not heard of her and the nearly one quarter who are not aware she is backed by hugely popular President Luiz Inacio Lula da Silva.

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For a factbox on the TV campaign click [ID:nN13177572]

For a graphic on recent polls click:

BRASILIA/RIO DE JANEIRO, Aug 12 (Reuters) – A federal prosecutor said he has launched a probe to determine if state oil company Petrobras’ oil-for-shares capital plan could harm public coffers, a move that could further delay the company’s proposed share offering.

Any delay would deal a heavy blow to Petrobras, which is depending on the plan to raise as much as $25 billion in fresh capital for its crusade to pump billions of barrels of oil from deep beneath the ocean’s surface.

The company previously postponed the transaction by two months from its targeted July launch because of delays in the valuation of the crude reserves to be used. This pushed down Petrobras’ stock, which was already depressed by uncertainty over the operation.

Brasilia-based public prosecutor Paulo Roberto Carvalho has launched his own inquiry, his office said on Thursday. He has also asked the government corruption watchdog, the TCU, to look into whether the state would be harmed if Petrobras swapped its shares for oil reserves at a price of $5 to $8 per barrel.

Markets believe the fair value for those reserves is $5 to $6 per barrel, while the government’s energy regulators believe the price should be $7 to $8.

“The signing of a contract to transfer five billion barrels, under the terms proposed, could imply billions in losses to the Brazilian state,” Carvalho wrote in his request to the TCU.

The probe is still in its early stages.