In
1989, Brazil held its first direct presidential election since
1960 following the end of the
military dictatorship in Brazil.
Fernando Collor, a young, charismatic leader who had previous served as
Governor of
Alagoas, won a hotly contested election versus
Luiz Inácio Lula da Silva after positioning himself as a political outsider. Just over two years into his presidency, Collor was faced with allegations of corruption by his brother
Pedro Collor, and chose to resign in late 1992 rather than face certain conviction and removal in an impeachment trial. Following his resignation,
Vice President Itamar Franco succeeded him in the office. Facing a hyperinflation crisis and popular discontent, Franco's government pushed a fiscal policy known as the
Plano Real (
Real Plan) to stabilize the economy.
Minister of Finance Fernando Henrique Cardoso, an experienced politician who had previously served as
Senator from
São Paulo and as Franco's
Minister of Foreign Affairs, served as the architect of the plan. Franco was barred from running for a full term in 1994. In Brazil, whenever a vice president serves part of a president's term, even when the president travels abroad, it counts as a full term. At the time, the Constitution did not allow a president to run for immediate reelection. In the absence of Franco, Cardoso would be chosen by the
PSDB (a party born from inside the PMDB) as their nominee for President of Brazil in the 1994 election. ==Lula's running mate controversy==