Brazil Markets Doubt Replacing Temer W/ Maia Would Favor Reforms
(Bloomberg) -- Market participants show doubts about the possibility of an eventual replacement of President Michel Temer with lower house speaker Rodrigo Maia favoring economic reforms.
- NOTE: Brazil lower house will vote on Prosecutor General’s report that accuses Temer of corruption; Temer denies the charges, but if indicted and found guilty, he could lose his job and be replaced teomporarily by Maia
- Analysts are skeptical about a quick and smooth transition and a bigger viability of pension reform approval if Maia takes over the Presidency
- Maia could be a quick fix to the crisis, aligned with economic team and reforms, but Temer’s "quick exit thesis" has no strength because the President has been steadfast in remaining in his post, says Patricia Pereira, fixed income manager at Mongeral Aegon
- "Market likes more pro-Temer news than against"
- "The market should not overlook the risks to the reforms, either with Temer or Maia," says Rafael Cortez, political analyst at Tendencias Consultoria
- On the positive side, Maia would tend to maintain economic team and reform agenda; "on the other hand, the question is the length of this process"
- Temer is giving signs that he will fight for his mandate, so the process can be long
- Another question is if Temer’s party PMDB would have the incentive to vote unpopular measures with a President from another party
- If the situation is not resolved as soon as the first vote on Prosecutor General’s complaint, speculation will continue as lower house needs to vote on other possible charges against Temer; Maia could bring some stability, says Luis Otavio Leal, chief economist at Banco ABC
- In terms of political stature and articulation capacity, at this moment, Rodrigo Maia is equal to or worse than President Temer, said Marco Antonio Caruso, economist at Banco Pine
- NOTE: Brazil’s Temer Reacts Amid Views of Maia as President: Reports
Original Story: Mercado mostra dúvidas com opção Maia para passar Previdência
To contact the translator on this story: Danielle Chaves in Sao Paulo at djelmayer@bloomberg.net Reporters on the original story: Josue Leonel in Sao Paulo at jleonel@bloomberg.net; Ana Carolina Siedschlag in São Paulo at asiedschlag@bloomberg.net Editors responsible for the original story: Daniela Milanese at dmilanese@bloomberg.net Marisa Castellani
Alert:
HALISTER1Source: BFW (Bloomberg First Word)
People Michel Temer (Federative Republic of Brazil)
Rodrigo Maia (Federative Republic of Brazil)
Luis Leal (Banco ABC Brasil SA)
Marco Antonio Caruso (Banco Pine SA)
Patricia Pereira (Mongeral Aegon Investimentos LTDA)
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