Area Stampa

FT: Investors labour under delusion Brazil is a quick fix

Brazilians love telenovelas, soap operas that air every evening in prime time.

President Dilma Rousseff’s recent impeachment offered all the typical twists and turns. The show involved months of political infighting and media attention, with former president and mentor Lula da Silva turning against Ms Rousseff’s policies — while singers Caetano Veloso and Gilberto Gil took her side, offering unconditional support. In a final turn of events, parliament first nullified the impeachment motion, then nullified the nullification.

Millions cheered as Ms Rousseff left the Palácio, while parliament welcomed Michel Temer’s new government. But the drama is far from over, and in fact, I believe Brazil’s Caipirinha Crisis is just beginning. Mr Temer will inherit an economy suffering from a bad hangover, after years of growth fuelled by generous pensions and government subsidies like Minha Casa Minha Vida (“My House, My Life”).