What is the political crisis in Brazil all about?
On March 13, more than 6 million people occupied streets in many cities in Brazil protesting against the corruption in the federal government. In a sequence of five protests in the last year, this is considered the biggest one. The protesters support the investigation of the Federal Police and the Federal Justice in Operation Car-Wash, which is the biggest investigation of a corruption ever in Brazilian history.
On March 16, just three days after the protests, the president Dilma Rousseff named as minister the ex-president Lula, who is being investigated in the operation Car-Wash. The position will give Lula privileged forum. In other words, Sergio Moro, the judge who is conducting the case, will not be able to keep the investigations towards the ex-president.
It seems that the president, who is facing a process of impeachment, doesn't care about the protesters claim, but just about the survival of her party. On the other hand, the reaction of the market came quickly. One day before the announcement, the Brazilian currency dropped more than 3 percent towards the American dollar.
The IBOVESPA, which is the main index of the Brazilian stock market, dropped more than 3 percent. Additionally, stocks of the state bank Banco do Brasil dropped 21 percent, and stocks of the state oil company Petrobras, which is the one involved in the corruption scandal, dropped 10 percent.
Cover credit: Agence France-Presse