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Argentine Political Outlook (Apr-04-16) PDF Imprimir E-Mail
Apr-04-16 - by Rosendo Fraga

1. The last week of March marked the culmination of a successful beginning of Macri´s term of office. On March 31, Macri participated in the IV Nuclear Security Summit held in the United States where fifty world leaders from countries with higher nuclear technology development took part. Argentine President Mauricio Macri agreed with Obama on preventing future terrorist attacks with nuclear weapons. Moreover, he met his Chinese counterpart as well as the Japanese, British, Canadian and New Zealand prime ministers and the European Council President. There, Macri ratified a policy that intends to match that of the United States; he talked about Asia, a pending issue so far amidst the fast turnaround in foreign policy; he talked with his Chinese counterpart about the review of agreements for the construction of two nuclear power stations and two dams in the province of Santa Cruz, Argentina; and he reiterated his call for investors to come to Argentina. He had to cancel meetings with the Indian and South Korean Presidents due to lack of time since the event evolved in less than 48 hours. Thus, during the last ten days of March, Obama´s visit to Argentina and Macri´s presence at this summit have strengthened a singular success together with the final approval by the Congress of the debt bill to settle with vultures funds and holdouts, a fundamental condition for Argentina to reenter foreign markets.

2. In the same breath, the approval of this bill by the Senate implies a significant political success. The President called it "the art of agreement". In the Senate, Cambiemos political party has only 15 seats out of 72. Despite such a difference, the bill was approved by 54-16 votes, with only two absent votes. Out of 42 FPV senators, 26 voted affirmatively and only 16 voted against, the latter making up for the total of negative votes. The agreement with the governors on the 15% reimbursement for the coparticipation that was withheld from the nationalization of the AFJP - private pension and retirement funds in Argentina - played a key role in the voting. From the 42 senators of the main opposition block, 17 compose the so-called "no cap senators" because they belong to provinces where the FPV party does not hold any government position and thence, they do not suffer from any pressure as regards any negotiations with the ruling party; such a group was the source of the negative votes. Moreover, the agreement will allow governors to obtain refinancing through the placement of bonds abroad in times of fiscal limitations. But at the same time, trade unions met with the three Peronist sectors in the Lower House (the FPV, Massa´s and Dissident Peronism sectors), and they agreed on a joint project to modify income tax brackets something the Executive is reluctant to do. As regards Peronism, this week the term for submitting the lists of candidates for the PJ´s authorities election is due. The election will take place in May. So far no unified list has been reached.

3. But at the same time, the social conflict flares up as the main challenge for the government during the second term of the year. The Church, through a study conducted by the Universidad Católica Argentina (UCA), informed that the poverty rate has increased from 29 to above 32%so far during Macri´s administration due to rising inflation. Teachers are planning a national strike and a march to support the six provinces that have not agreed on their teachers´ salaries yet, and they will do it on the very same day when the ninth anniversary of a teacher´s death on the hands of a police officer during a protest in Neuquén is celebrated. On Friday, port and maritime trade unions will strike and march against dismissals. Late April, the main three peronists unions will strike in order to support the following claims: the change of income tax brackets - this would be triggered in Congress hand in hand with the opposition, suspension of dismissals by means of declaring an "occupational emergency", and the unification of family allowances. One of the most important union leaders, Gerardo Martínez (Construcción) said that the country was heading towards a political crisis due to a combination of dismissals and inflation. But the most explicit alerts have emerged in the province of Buenos Aires. On March 29, during a plenary session of 35 FPV mayors, Buenos Aires PJ President (Espinoza) said that if the conurbation bursted, the President would fall, and Berazategui Mayor (Mussi) said that there could be a burst in the Conurbation. The following day, 93.000 officers from the Buenos Aires Police made a call for a stoppage strike through social media. The Buenos Aires Governor (Vidal) in order to fend off this protest, granted the 25% salary increase. Amidst this situation, an inevitable rise in transport fares adds up to widespread social unrest.

4. Additionally, corruption flares up due to a series of circumstances with unpredictable political consequences. Spreading of the "Panama Papers" made both President Mauricio Macri and former President Cristina Fernández de Kirchner to release communiques with the purpose of denying their responsibility over the facts. However, the political effects of this information are starting to be felt worldwide. Investigation on corruption scandals carried out in Brazil show connections with Argentina such as those affecting the former Ministry of Planning and Infrastructure (De Vido)-President of the Energy Committee in the Lower House- that derive from an "image" impact that pushes judges and prosecutors in Argentina to be more active when investigating corruption cases. In addition to that, complaints affecting Kirchnerism are making progress: this week former Central Bank President (Vanoli) will give testimony in the case of US dollar index futures contract; businessman Lázaro Báez, who might be detained, will also give testimony. Reports against businessman Cristóbal López will continue their way in several courts. Moreover, the detention of the first Kirchnerism officer on a corruption case (Jaime)will not be the only one. Court claims on "clout traffic" against a businessman close to the President (Angelici), filed by Elisa Carrió who has also protested against the "brutal adjustment" - and her warnings on the fact that a businessman close to the President(Caputo) must sell his companies, are generating political stir within the ruling party from its own ranks.

5. To conclude:

a) Macri´s participation in the Nuclear Security Summit and the bilateral meetings held with different world leaders marked the culmination of a successful turnaround in the foreign policy arena.

b) The approval of the debt bill by the Senate in order to settle with vulture funds and holdouts means a singular success in domestic policy showing that Argentina may have governability without hyper-presidentialism.

c) But during the second term of the year, social conflict has flared up as the main challenge, with a significant increase in claims and streets demonstration; the Conurbation is the most difficult situation

d) Corruption cases that came to light through the Panama Papers, investigations in Brazil, the complaints against Kirchnerism, and Carrió´s denunciations are of an imponderable nature.

 
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