UPDATE 2-Brazil VP drops liaison role, remains in Rousseff gov't -sources
(Adds second source, comment from political analyst)
By Leonardo Goy
BRASILIA Aug 24 (Reuters) - Brazilian Vice President Michel Temer has decided to drop his role as day-to-day political coordinator in Congress for President Dilma Rousseff but is not leaving her government, two sources in the administration said on Monday.
Temer is an important ally of the embattled Rousseff and his decision will further hamstring the unpopular president, who is facing calls for her resignation or impeachment as the economy flounders.
The sources, who asked not to be named, said Temer would no longer handle Rousseff's political relations with coalition allies, which have been tense due to corruption allegations and disagreement over budget cuts aimed at saving the country's investment grade credit rating.
"This will reinforce market worries about the government's ability to execute economic policies," said Rafael Cortez, a political analyst at the Tendencias consultancy in Sao Paulo.
"Temer's role was to help the government get fiscal adjustment measures through Congress," Cortez said.
Aviation Minister Eliseu Padilha, a political veteran in Temer's PMDB party, will take over the political coordination role until the end of the month, the sources said.
Earlier on Monday, in a show of commitment to austerity, the government announced plans to eliminate one in four ministries, doing away with several posts often used for political bargaining. Continuación...