Brasil's Tenancious Temer

Tenacious Temer

When Michel Temer became Brazil’s president last year, hopes were high he would restore a measure of calm to the country.

After all, over the course of three years, Brazil has been rocked by a vicious recession, the impeachment of ex-President Dilma Rousseff and the never-ending revelations stemming from the sprawling probe into corruption at the state-controlled oil company Petrobras.

A former vice president under Rousseff, Temer entered office on a reform platform, promising to enact much-needed economic reforms and to create jobs for Brazil’s 14 million unemployed.

With a series of pension and labor reforms working their way through Brazil’s parliament, it looked like Temer was going to make good on his word – for a while.

But following the release of an audio recording in which Temer appeared to endorse bribes to ex-Brazilian House Speaker Eduardo Cunha, it looks like Temer will be struggling to hold onto his job.

“Very few people believe that he’s going to stay in,” Oxford Economics analyst Marcos Casarin told CNBC. He estimated the chances of Temer leaving office before his term ends next year are “100 percent” at this point.

Cunha is the now-imprisoned Brazilian lawmaker who orchestrated Rousseff’s impeachment.

The recordings purportedly show Temer giving the chairman of meatpacking giant JBS approval to funnel hush money to Cunha in jail. JBS executives have also told prosecutors they’ve paid millions in bribes to Temer and his predecessors.

Temer dismissed the recording as a fake and has so far rejected calls for his resignation.

He has asked Brazil’s Supreme Court to suspend its investigation into him until the veracity of these recordings could be confirmed.

But the damage may already be done.

Thousands of protesters gathered on Sunday in cities across Brazil to demand Temer’s ouster, the BBC reported. Organizations like the Brazilian Bar Association have filed impeachment motions against the president, wrote Reuters.

Brazil’s currency and stock markets also took a beating as fears that Temer’s reforms will now be abandoned have triggered a sell-off.

Temer also lost a key coalition partner when the Brazilian Socialist Party said it would no longer support the president and his conservative PDMB party in parliament.

Still, Temer was spared a potentially fatal blow when his main coalition ally – the Social Democratic PSDB – refrained from making a decision on their withdrawal.