Brazil opposition leaders join forces against Rousseff

By Jeferson Ribeiro and Anthony Boadle

BRASILIA (Reuters) - Two of Brazil's most popular opposition leaders joined forces on Saturday in an unexpected alliance that shakes up next year's election and could pose a major challenge to President Dilma Rousseff at a time when the economy is sputtering.

Marina Silva, a colourful former environment minister who was running second in polls for next year's presidential vote, said she was setting aside her own presidential ambitions to join the centre-left PSB Party and support its candidate, Pernambuco state Governor Eduardo Campos.

Their alliance, which came together only in the past 24 hours and was a total shock to Brazil's political establishment, instantly creates a business-friendly alternative to Rousseff with nationwide organization, robust financing from donors, and popularity among rich and poor voters alike.

Campos had been running fourth in most polls, with only single-digit support. But with Silva's endorsement, and possibly her as his running mate, he now seems well-positioned to cash in on growing discontent among the business elite with Brazil's stagnant economy, as well as popular unrest following a wave of anti-government street protests in June.

"This isn't more of the same. This is what's new ... what's surprising," a smiling Silva told a packed news conference in Brasilia, standing by Campos' side.

Asked if the alliance improves his chances of becoming president, a confident Campos replied: "I don't think anybody here has any doubt about that."

Rousseff, a pragmatic leftist, will not be easy to unseat. While she has not officially announced her candidacy for re-election in 2014, she currently leads polls by a healthy margin and has seen her popularity bounce back recently after taking a huge hit during the protests.

Rousseff retains broad support among Brazil's poor, thanks to unemployment near record lows and her party's success in reducing poverty over the past decade. She also has the backing of former President Luiz Inacio Lula da Silva, who remains Brazil's most popular politician.

Marina Silva, who grew up poor in the Amazon and served as environment minister under Lula, is very popular among younger Brazilians, environmentally conscious voters and evangelical Christians. She placed a strong third in the 2010 presidential election on the Green Party ticket, and had been rising in polls since the June protests.

However, her bid to create a new political party failed this week because of legal technicalities, prompting her to turn to the PSB, the acronym for the Brazilian Socialist Party.

The PSB offers Silva an organized, well-funded party that is relatively distanced from the corruption accusations that have plagued other Brazilian political groups, including Rousseff's Workers' Party, in recent years.

Some senior politicians have said privately that Silva, who has suffered over the years from health problems including hepatitis, seemed more comfortable in a "figurehead" role that would allow her to pursue her passions, including environmental issues, without worrying about other concerns like the economy.

"ONLY GOD KNEW"

The alliance could prove difficult to maintain, however. Silva has quit two other parties following disputes over ideology and organization in the last four years, and it is unclear how Campos' pro-business agenda will square over time with Silva's emphasis on the environment and sustainable growth.

Campos is well-regarded by business leaders, and his party was part of Rousseff's governing coalition until earlier this year. He broke ranks after criticizing her for excessive intervention in Brazil's economy, which has struggled with slow growth since Rousseff took office in early 2011.

The new duo also poses a challenge to the Brazilian Social Democratic Party (PSDB), which governed Brazil from 1995-2002 and until Saturday was seen as the country's strongest opposition force. Its likely candidate, Senator Aecio Neves, has slid backwards in some polls recently and has been stuck in third place.

"Today, we're breaking a false polarization that needs to be broken in Brazilian politics," Campos said. Referencing the protests earlier this year, he said "whoever understood what happened in June will understand what's happening here today."

Beto Albuquerque, the PSB's leader in the house of deputies, told reporters that Silva had "discussed the possibility" of being the vice presidential candidate on Campos' ticket.

Paulo Sotero, head of the Brazil Institute at the Wilson Centre in Washington, said the alliance was widely seen as a "masterstroke" by Campos that effectively turns next year's election upside-down.

Silva gives Campos "legitimacy among leftist and centre-leftist voters" and creates a strong nationwide ticket, since Campos is strong in Brazil's northeast and Silva is most popular in the relatively wealthy south and southeast, Sotero said.

Until Saturday, most political observers had expected Silva to join a smaller party, and virtually no one had predicted an alliance with Campos.

Silva said joining the PSB had been one of her backup plans if her own party failed, but acknowledged the secret was closely kept. "Only God knew about this," she said.

(Writing by Brian Winter; Editing by Todd Benson and David Brunnstrom)