Crisis in Brazil - centre left government could fall

"Brazil was teetering on the brink of a constitutional crisis on Thursday after a judge blocked President Dilma Rousseff’s appointment of her predecessor, Luiz Inácio Lula da Silva, to her cabinet, prompting clashes in Congress and on the streets.

Just as Mr Lula da Silva’s swearing-in ceremony drew to a close, a federal judge issued an injunction, suspending the ex-president’s appointment on the grounds that it prevented "the free exercise of justice" in corruption investigations.

Opposition politicians hailed the decision as a triumph for Brazilian democracy, while the government vowed to appeal, lambasting the order as part of a “coup” by the country’s elite, reminiscent of Brazil’s period of military rule. Brazilian assets rallied as investors bet on the government’s collapse.

“Since the end of the dictatorship and the transition to democracy over recent years, this is our most dramatic political moment — we have no idea what tomorrow will even look like,” said Gabriel Petrus, analyst at the consultancy Barral M Jorge Associates in Brasília.

State prosecutors requested Mr Lula da Silva’s arrest last week over charges of money laundering and fraud, accusing the former president of secretly owning a beachside penthouse at the centre of investigations into corruption at state oil company Petrobras." (FT.com)

For why Brazil has reached this crisis, see Michael Roberts' post.