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BRASILIA (Reuters) - A Senate report found on Tuesday that Brazil's suspended President Dilma Rousseff violated the constitution by manipulating government accounts, moving her drawn-out impeachment trial closer to deciding her fate.
The report is expected to be approved by the impeachment committee on Friday and by the full Senate next Tuesday, leading to the final trial phase in which the 81 Senators must reach a verdict at the end of August or first days of September.
The impeachment of the unpopular leftist leader has paralyzed Brazilian politics for seven months and held interim President Michel Temer in a legal limbo that has hindered his efforts to pull Brazil from fiscal crisis and severe recession.
Rousseff is accused of altering official budget figures and using funds from state-run banks to cover up the real state of Brazil's faltering economy as she ran for re-election in 2014.
Her impeachment would mark the end of 13 years of rule by the left-of-center Workers Party and leave Latin America's largest economy in the hands of the Temer, Rousseff's conservative vice president.
Brazil's stock market and currency have strengthened since Rousseff was suspended by the Senate on May 12 as investors bet on her removal and replacement by Temer, who has outlined policies favoring private business.
But Temer has avoided unpopular austerity measures needed to balance Brazil's overdrawn accounts until he is definitely confirmed in the job to serve out Rousseff's mandate to 2018.
While 54 votes are needed to convict Rousseff, or two-thirds of the Senate, Brasilia-based political consultancy ARKO Advice says between 56 and 60 Senators today favor removing her, a narrow margin that is unlikely to be reversed because Temer is seen delivering political and economic stability.
"The majority sentiment in the Senate is that market expectations regarding the economy are improving significantly and that the return of the suspended president would put the country in a difficult situation again," ARKO said in its monthly analysis for clients.
Efforts to defend Rousseff by her Workers Party and its founder, former President Luiz Inacio Lula da Silva, who faces corruption charges, have not been enough to save her, Arko said.
The Senate impeachment committee listened to the author of the report, Senator Antonio Anastasia, read out from its 440 pages detailing the alleged illegalities of the accounting methods that Rousseff used to augment her government's spending power in the run-up to the 2014 election.
Anastasia, a member of the PSDB, the main opposition party to Rousseff's administration, said there was enough evidence for the impeachment trial to proceed.
"What we found was an expansive spending policy that was not fiscally sustainable and lacked transparency with operations that bypassed Congress and did not follow good practices of budget management," Anastasia said in his report.
Rousseff has denied she broke budget laws and maintains she is the victim of a right-wing conspiracy to overthrow her government that advanced the interests of Brazil's poor. In her written defense last month Rousseff said Brazilians knew an honest woman was being put on trial and she called the impeachment a "farce" and her alleged crimes no more than "routine acts of budgetary management."
The trial phase in the Senate will be presided over by Brazil's Chief Justice Ricardo Lewandowski.
According to the Supreme Court, if the Senate approves Anastasia's report next Tuesday - only a simple majority is needed - the final trial session would begin on Aug. 26 and last about a week, with a final vote on Sept 2.
Temer aides hope the trial will end sooner so he can attend the summit of G20 nations in China at the beginning of September without any doubts about his legitimacy. Temer has said he will not go to the meeting otherwise.
Reporting by Maria Carolina Marcelo and Alonso Soto; Writing by Anthony Boadle; Editing by Tom Brown