Dilma Rousseff may not be a good president, writes Brian Caplen, but impeaching her will lead to years of uncertainty and bitterness in Brazil.

The fundamental principle of democracy is that bad presidents, and indeed whole governments, are thrown out at the ballot box. Dilma Rousseff is presiding over the worst economic crisis in Brazil in a generation. On top of this, the country is coping with the Petrobras corruption scandal, and as a former chairman of the state-run oil company Ms Rousseff should take responsibility for the situation. She probably should resign.

Yet to date Ms Rousseff is not accused of any crime. Impeachment is a process more usually used in corruption cases, as was the case back in 1992 against former Brazilian president Fernando Collor de Mello. 

Ms Rousseff is charged with hiding the true extent of the budget deficit by borrowing from state banks – to the tune of 5.1% of GDP in 2014. But if these kind of accounting tricks were impeachable offences, we would be short of quite a lot of finance ministers globally. The non-accounting of public-private partnership debt would also fall into this bag. 

In reality, the economic sins of Brazil's PT coalition are familiar ones from left-of-centre governments – a failure to reform, a failure to overcome poverty through sustainable economic growth, and falling back instead on ever more costly social programmes. In fact, successive Brazilian governments have failed to get to grips with indexation and the country's costly pension system so Ms Rousseff is hardly unique.

Ms Rousseff has described the impeachment process as a coup. The danger is that her supporters – many of them trade unionists – share her view and lose faith in the democratic process. In any case, impeachment will lead to years of uncertainty and chaos, whereas in 2018 Brazilians could have thrown her out at the ballot box.

Markets are celebrating her impeachment, but they may be celebrating too soon.

Brian Caplen is the editor of The Banker.

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