Brazilian President refuses to resign despite corruption allegations

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Brazilian President Michel Temer on Thursday dismissed the possibility of resigning amid corruption accusations.

"I will not resign", Temer said in a televised message to the nation after the Supreme Federal Court chose to open an investigation regarding allegations made the previous day that he approved of payments to a former powerful lawmaker to keep quiet.

Analysts said Temer is unlikely to receive support from a significant share of his coalition, who were afraid of attaching themselves to an administration already being regarded as doomed.

Rousseff, from the leftist Workers' Party, accused Temer and Cunha, from the center-right PMDB party, of mounting a coup. The speaker of the lower house of Congress, Rodrigo Maia, who is next in line of succession due to the absence of a vice president, would take over until Congress elects a new president within 30 days to lead the country until the end of next year. Temer denies the allegation.

The Supreme Court gave its green light to the investigation, the state-owned Agencia Brasil and leading newspapers reported. SUPREME COURT PROBE Brazil's top court opened an investigation on Thursday into the possible obstruction of justice by the president.

The scandal is the latest shockwave from the wider "Car Wash" graft probe ripping through Brazilian politics.

Batista's tape has earned him and his brother Wesley, JBS's CEO, immunity from prosecution. "It is not enough to overthrow the current representative of capital", she said, adding that reforms involving spending cuts need to be reversed.

Temer quickly set about introducing market reforms to try to get Brazil's floundering economy back on the rails. Instead, the veteran center-right politician - who took over a year ago with a promise to restore Brazil's stability after the impeachment of leftist president Dilma Rousseff - came out swinging. That's basically a huge inquiry into an enormous interlocking set of scandals in which politicians here have basically been handing out contracts to the country's industrial giants in return for kickbacks into the party coffers or, in some cases, offering to pass legislation favorable to those industrial entities in return for payments.

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O Globo reported that Batista had also secretly recorded conversations with Senator Aecio Neves asking for legal defense monies.

During the meeting Mr Batista apparently raised the issue of paying Mr Cunha to keep him quiet.

A man believed to be Temer can be heard in the recording saying, "You have to keep that up, see?", apparently in reference to payments made to buy the silence of a potential witness.

"Resignation is the easiest way to resolve this", said Senator Ana Amelia, from the PP, who had supported Rousseff's impeachment a year ago.

Globo did not release the purported recording but said the information came from a plea bargain between prosecutors and JBS' Batista.

"This certainly makes approval of the reforms more hard", Senator Valdir Raupp, a close ally to Temer, told Reuters.

"The dramatic political weakening of the government must, at a minimum, delay the timetable for passage of the labour and pension reforms", political consultancy Arko Advice said in a note. Brazilian Finance Minister Henrique Meirelles called foreign and local investors to try to calm markets, according to a government source briefed on the matter.

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