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Argentine Political Outlook (Feb-29-16) PDF Imprimir E-Mail
Feb-29-16 - by Rosendo Fraga

1. The foreign policy was at the center of Macri's Administration during the past week. The decision by Obama to visit Argentina grows in significance as a gesture. It is the sixth time that a President of the United States arrives in the country; however, it is the first time that the president only comes to Argentina in South America. Roosevelt and Bush Jr. were here due to inter-American meetings and former Presidents Eisenhower, Bush Senior and Clinton visited other countries in the region in addition to the Argentina. The visit falls will be during the Holy Week and therefore the American President would extend his stay for a couple of days to rest in Bariloche. The French President's visit showed the Argentine Government his interest in advancing the FTA between Mercosur and the EU. Macri should observe that last week the 12th round of negotiations for the FTA between the U.S. and the EU took place, which Obama wants to complete at the end of the year, before leaving power. The fact that Mercosur is the Latin American area of this agreement, as three of the four countries of the Pacific Alliance are in the trans-Pacific FTA, is a goal to set. The meeting in Rome with the Italian Prime Minister has shown an Argentine purpose: to host in 2018 the G20 Heads of Government Summit. As for the meeting with the Pope, he showed his distance with Macri, as foreign media reflected. The meeting did nothing to bring positions together, beyond speeches and expressions of the Argentine Government.

2. This week, the epicenter of politics will be in Congress and in Macri's address in the opening of the ordinary sessions. It is the last chance that the President has to report the received legacy. After this day, the problems will be perceived as belonging to the Government in office by most of the public. The political wing of the Government (the Minister of the Interior and Radicalism), have called for the legacy to be disclosed but the advisory team led by Ecuadorian Jaime Durán Barba, seems to have imposed the thesis that it is not convenient to give bad news. From the economic area the advice is also not to show an Argentina with difficulties, which can scare off investments. In this context, Macri would focus on proposals (after Massa's style in his campaign) to fight corruption, reform and modernize the Judiciary, clean up the electoral system and reverse the effects of inflation on the lower income sectors. But in March, the Executive needs Congress to resolve key issues: the agreement with the holdouts that requires simple majority in both houses; the agreement for the appointment of new members of the Court, which just as  for ambassadors and Central Bank board members, requires two-thirds of the senators present and the endorsement of the urgency decrees, for which Bicameral Committee on parliamentary Legal procedures pronouncement is necessary as well as the approval by a Chamber by simple majority.

3. This leads to negotiations with Peronism, which is key to governance for the new office. Of the 8 urgency decrees filed by Macri, Massa objected to only one: the one that overrides the 15% return of the co-participation to all provinces signed by Cristina Kirchner in her last days in Government. Without the vote of Massa's representative in the Bicameral Commission, Cambiemos cannot approve the decrees. The Executive had to accept a compromise by which it will return the 15% to the provinces on a staggered basis over the next five years, ending at the end of 2020, including the retroactive amount for eight years. It is actually an expression of the "art of agreement" proposed by Macri when taking over. This shows the way in the next few weeks: possibly, the ruling coalition will achieve its goals in Congress, but at the cost of negotiating and yielding, as Governor Vidal in January in the province of Buenos Aires, when half of peronism gave her the two-thirds to authorize the provincial debt. The Governor has opted for a permanent parliamentary coalition and disclosing the legacy, by saying that she has received a broken province, with a different political style compared to the president's. In terms of the PJ meeting, it confirmed that the conditions do not exist for a new leadership to emerge, what could happen just after elections in 2017.

4. As politics seems to be on track, "the street" is the stage for the political threats to Cambiemos. Weak in Congress and among Governors and facing legal threats - as shown by the allegations of Prosecutor Sáenz in the Nisman case and the examination summon to Cristina by judge Bonadio - Kirchnerism turns left making street protests its most important course of action. On February 17, 40 Kirchnerist groups and allies conducted 200 roadblocks across the country, calling for the freedom of Milagro Sala. Next March 24 -40th anniversary of the last military coup, with Obama in the country- Kirchnerism for the first time in eight years will be launching a march along with the left. On April 13, when Cristina testifies before Bonadio, a Kirchnerist demonstration will take place throughout the country under the slogan "If Cristina is affected..." The ATE strike and march in the city of Buenos Aires on 24 February showed the inconsistency of the Government, which had announced the implementation of a protocol to prevent them immediately which it failed to enforce. In terms of trade unionism, the Government ended up yielding to unions so that school begins in time in the province of Buenos Aires, although this will complicate the anti-inflationary policy. The three Peronist union confederations, led by Moyano, Calo and Barrionuevo, got together in February 26, confirming their unity and criticizing Macri but not confronting, while the two CTAs are getting organized, carrying out their claims, as happened last week in the city of Buenos Aires.

5. To conclude:

a) Foreign policy was on the spotlight last week with Macri's success stories including Obama, Hollande and Renzi and some frustration with the Pope.

b) This week, Congress plays a central role with Macri's address to open the ordinary sessions more focused on proposals than on disclosing the legacy.

c) The PJ meeting showed its division but governors are willing to negotiate as evidenced in the agreement reached with Massa on the restoration of co-participation.

d) Kirchnerism and the left, weak in the political system, converge in bringing the opposition to the streets, where government shows vulnerabilities.

 
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