Dilma Rousseff Removed From Office

Brazil's Senate removed President Dilma Rousseff from office on Wednesday for breaking budgetary laws, ending an impeachment process that has polarized the scandal-plagued country and paralyzed its politics for nine months.

Senators voted 61-20 to convict Rousseff for illegally using money from state banks to boost public spending, putting an end to 13 years of leftist Workers Party rule in Latin America's largest economy.

Conservative Michel Temer, the former vice president who has run Brazil since Rousseff's suspension in May, was to be sworn in by the Senate at 4 p.m. local (1900 GMT) on Wednesday to serve out the remainder of the presidential term through 2018.

Under Brazilian law, a dismissed president should be barred from holding any government job, including even teaching posts at state universities.

However, senators voted 42-36 to allow Rousseff to retain the right to hold public office, in an apparent sign of doubts over whether a budgetary sleight of hand that is common in Brazil was truly an impeachable offense.

Brazil's first female president has denied any wrongdoing and said the impeachment process was a coup d'etat aimed at protecting the interests of the country's economic elite and rolling back social programs that lifted millions of Brazilians from poverty during the last decade.

A lawyer for Rousseff said she would appeal her dismissal at the Supreme Court.

Her opponents, however, said her removal set the stage for Brazil to emerge from a drawn-out political crisis. They also hope it will help end the country's worst recession in generations, even as the political class continues grappling with a sweeping corruption scandal at state oil company Petrobras .

"Today we turned an important page in the history of our country," said Aecio Neves, leader of the center-right PSDB party that backs Temer. "Brazil has given itself a new chance, to look to the future and construct and agenda for reform in line with the economic crisis."

Neves narrowly lost the 2014 election to Rousseff.

HONKING HORNS, FIREWORKS

Motorists honked car horns in the Brazilian capital in a blaring tribute to the removal of a president whose popularity had dwindled to single figures since winning re-election in 2014.

In Brazil's largest city, Sao Paulo, fireworks exploded in celebration after the vote.

Temer has vowed to boost an economy that has shrunk for six consecutive quarters and implement austerity measures to plug a record budget deficit, which cost Brazil its investment-grade credit rating last year.

An upturn in corporate investment in the second quarter provided a glimmer of economic hope for Temer and economists expect a return to growth before the end of the year.

However, Temer is likely to face bitter political opposition from the Workers Party, which has vowed to take to the streets in protest against Rousseff's removal from power. There are also signs of clear resistance in Congress to Temer's proposals to cap public spending and reform public pensions.

Brazil's stocks and real currency slightly accelerated gains following the Senate's decision but the reaction was muted as most traders were already counting on the result.

Markets analysts said investors would now be looking to Temer to deliver on his promises of fiscal reforms.

"What changes now, with Temer definitively confirmed, is that the pressure will increase on him to deliver," said Newton Rose, chief economist at Sulamerica Investimentos. "The honeymoon is over, and the market wants to know now how capable he is to govern and put the government accounts in order."

Temer's government also risks entanglement in a sweeping investigation of kickbacks at state oil company Petrobras PETR4.SA that already ensnared dozens of politicians in Rousseff's coalition.

The scandal, which has tarnished Temer's fractious Brazilian Democratic Movement Party, could hobble efforts to stabilize Brazil and restore confidence in its economy.

In an emotional speech on Monday, Rousseff compared the trial to her persecution under Brazil's 1964-1985 military dictatorship, when she was tortured by security services as a member of a leftist urban guerrilla group.

Rousseff became the first Brazilian leader dismissed from office since 1992, when Fernando Collor de Mello resigned before a final vote in his impeachment trial for corruption.

Conservative Senator Ronaldo Caiado said the constitution did not allow for the prohibition on holding public office to be waived for Rousseff and he plans to appeal the decision before the Supreme Court.

(Additional reporting by Lisandra Paraguassu, Alonso Soto and Anthony Boadle in Brasilia, Bruno Federowski and Guillermo Parra-Bernal in São Paulo; Writing by Daniel Flynn and Brad Haynes; Editing by Jeffrey Benkoe and Tom Brown)