MELISSA BLOCK, HOST:

There was more political chaos in Brazil overnight and a big setback for the embattled government there. Brazil's president, Dilma Rousseff, is facing impeachment, and the former president is being investigated for corruption. There have been huge protests both against and for the government. And there are concerns that the world's eighth-largest economy could be headed for a meltdown. NPR's Lourdes Garcia-Navarro joins us on the line from Sao Paulo. Good morning, Lulu.

LOURDES GARCIA-NAVARRO, BYLINE: Good morning.

BLOCK: And could you back up just a little bit? Talk about what's led to this political chaos.

GARCIA-NAVARRO: Right. Former president and leftist Luiz Inacio Lula da Silva - you may recall as sort of a towering figure in Brazil. He's credited with lifting millions out of poverty during his two terms in office.

Earlier this month, the country was sent into shock when he was detained and questioned over allegations that he was involved in a massive corruption scandal involving the state oil company. His ally and protege, Dilma Rousseff, who is facing her own troubles, offered him a place in her cabinet, and that kicked off a whole world of trouble. You know, many people saw the appointment as a way to shield Lula - as he's known here - from prosecution. Immediately there were tons of legal challenges and now the Supreme Court has ruled that he cannot take office.

BLOCK: And what does that mean for Lula and for the government there in Brazil?

GARCIA-NAVARRO: Well, nothing good for either of them. It means Lula could be arrested at any time, and for Dilma Rousseff, it means that she is a lot weaker. She was hoping Lula could help bolster her in Congress where she's fighting to stay in power amid impeachment proceedings against her. So it's a volatile situation that's become even more so.

BLOCK: Yeah. We mentioned that there have been massive protests, and you were at one of those yesterday. Tell us about it.

GARCIA-NAVARRO: Yeah, I was. Hundreds of thousands of people came out onto the streets in pro-government demonstrations across Brazil yesterday. You know, I'm in Sao Paulo where almost 100,000 people gathered. There was really one man that they came to see.

UNIDENTIFIED PEOPLE: (Singing in foreign language).

GARCIA-NAVARRO: That's the sound of the crowd coming out to support Lula, who was there. You can hear them chanting Lula, Lula. He gave a speech to the gathered masses where he said the attempts to jail him and impeach the president were a coup, and he said he was there to defend democracy. You know - and while these pro-government protests were smaller than the antigovernment ones we saw last weekend, they do show that this government has a great deal of support still.

You know, this country is deeply polarized among right and left, rich and poor. Most of the demonstrators yesterday believe that it's venal politics at play because the economy is going badly and not justice being served. Many of them said that they were willing to fight on the street to protect the government should Dilma be impeached or should Lula be arrested.

BLOCK: Is either of those things imminent, Lulu?

GARCIA-NAVARRO: That's really unclear. At this point, Lula is exposed. His case has gone back to this crusading judge who is overseeing this massive corruption scandal. And he's already been detained and questioned, so that clearly is the next step for him. And Dilma Rousseff is in the process of being impeached. They have fast tracked that in the Congress now, and so we are possibly seeing that happening as soon as a few weeks.

So really it's minute by minute here. It's very unclear what is going to happen next. Every day seems to bring some new development, but certainly the situation of Dilma Rousseff and her predecessor, former President Lula, is very, very precarious.

BLOCK: That's NPR's Lourdes Garcia-Navarro covering the ongoing turmoil in Brazil. She joined us from Sao Paulo. Lulu, thanks so much.

GARCIA-NAVARRO: You're welcome. Transcript provided by NPR, Copyright NPR.

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