But with Temer girding for a fight and the possibility that explosive new allegations could surface at any time, the chances of a return to economic and political stability looked even more remote for South America’s largest nation, which was rocked less than a year ago by the impeachment of the previous president in a different scandal.
Brazil’s financial markets plunged Thursday amid concerns that the political crisis would derail economic reforms that Temer had championed to boost the economy. The country’s currency, the real, closed down 8 percent, erasing its gains this year, and the Brazilian stock market fell 9 percent, its worst daily loss in nine years. State-controlled companies lost about 20 percent of their value.
“I don’t see how Temer survives more than a few weeks,” said Brian Winter, a Brazil expert and the editor of the New York-based Americas Quarterly journal, adding that Temer appears to be “in denial,” given the evidence against him and his evaporating political support.
Through plea bargains, in which defendants provided prosecutors with information in exchange for more-lenient sentences, authorities have been able to trace a major kickback scheme from a Brasilia carwash to the highest echelons of the government.
Temer had managed to mostly avoid being tainted by the probe. But the spotlight fell on him Wednesday, after Brazil’s O Globo reported that Temer had been the target of a police sting operation in which he was allegedly recorded condoning a hush-money payment by a Brazilian business tycoon to the jailed former leader of congress, Eduardo Cuhna, who is serving a 15-year term for negotiating millions in bribes.
Cunha had been one of the country’s most powerful men, and is believed to have compromising information on several top politicians who have not been formally accused.
Temer has acknowledged meeting with the executive who is the alleged source of the recordings, meatpacking tycoon Joesley Batista. But the president insisted Thursday he hadn’t broken the law and the investigation would exonerate him.
Opposition lawmakers attempted Thursday to open impeachment proceedings against Temer, which may increase pressure on authorities to release the allegedly incriminating tapes.
A new impeachment push would come less than a year after the last president, Dilma Rousseff, was forced out on charges of violating budget laws, bringing Temer to power through a process that many Brazilians view as politicized
Temer’s ministers of culture and city planning resigned Thursday, but the president was reportedly encouraged to hold onto power by his closest allies and key members of his inner circle.