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Argentine Political Outlook (Jan-30-18) PDF Imprimir E-Mail
Jan-30-18 - by Rosendo Fraga
  1. In February, no extraordinary sessions of the Congress will be held, but on the 6th the Parliamentary Legal Committee is scheduled to meet to discuss the "de-bureaucratization" emergency decree. The idea of Macri of ruling by decree, avoiding to negotiate reforms with the "dialogist" Peronism, will be put to the test in February, with the approval of the decree that "de-bureaucratizes and speeds up" the operation of the State, which repeals 19 laws and amends 140. For the opposition, this is unconstitutional, because when the economic emergency came to an end in December, the Executive no longer has had the legal backing to assume the powers of the Congress. The Bicameral Commission for Parliamentary Legal Proceedings - composed of 8 senators and 8 members- in which the ruling party has a majority by one vote by having the President, will approve it on Feb 6. But then, the Lower House must validate such approval. If both Houses reject it, the decree will drop. If only one validates it, it remains firm. The government assumes that the Lower House might reject it, but hopes to negotiate with governors that the Senate will not. At the same time, the Governor of Buenos Aires (Vidal) decided to suspend the provincial pension reform she announced, which was in line with the national one, to avoid the political costs involved. A key man of his team (Salvai), denied an eventual presidential candidacy for her, seeking to neutralize suspicions within Cambiemos. Meanwhile, the Buenos Aires Peronism took a step towards unity, with the summit held in San Fernando. But Cristina showed once again that she is not willing to facilitate such unity, by deciding that the leaders who respond to her do not attend.

  1. The relations between unions and the government will be key in February and Moyano and his allies have called a march for Feb 22, which tries to be a show of power. The court cases are closing in: complicity and cover-up with the supporters of Independiente soccer team, which affect Pablo Moyano; money-laundering involving the stepchildren of the truck driver's wife; those that affect the funds of the union and its social welfare funds, which involve the same Hugo Moyano. Not only his detention, but that of his son and stepsons, are a threat. His response is the call for a protest march that will take place in the city of Buenos Aires on February 22, where he seeks the participation of the CGT, the CTA, social movements, - who have confirmed their participation, - mayors and Kirchnerism. It is a great opposition march. The government for its part continues to challenge trade unions: audits are being carried out in the union-run social welfare funds of fifty unions, the special contribution of unaffiliated members will be removed from the banking union and on February 23 the public trial starts against the former secretary general of the SOMU (maritime union), "Caballo" Suárez, confronted with Moyano, but the archetype of union corruption according to the ruling party. The unions respond in the collective bargaining agreements, where they reject the 15% suggested by the government and refuse to drop the "trigger clause" as intended. But there are also channels of dialogue and eventual negotiation. Thus, on February 2, the Minister of Labor, confirmed despite the complaints that affect him, will meet with the triumvirate of the CGT that responds to Moyano (Schmid). On February 1, the transport fare increase takes effect and the unionists will add the matter to their claims.

  1. On February 1, the judicial fair ends and this implies the reactivation of various judicial cases with political impact. In the cases that affect Kirchnerism, the following stand out: the claim against Cristina and De Vido of 22,500 pesos paid by the National Road Entity for surcharges; the decision of pretrial detention by the cassation chamber issued in the case of the Memorandum with Iran; the judicial decision on the sale of the companies of Cristóbal López and the 13 requests for reorganization that they have in the court that hears commercial matters; the decision of Echegaray's request to remove the inhibition of his assets and the possibility of disclosures in the case he faces for favoring Cristóbal López; on the other hand, Boudou, in spite of the cases against him, already tours the country in political campaign. But there are situations that also affect the ruling party: the Anti-Corruption Office has complaints about the appointments in two unions (Somu and Upsara) by the Ministry of Labor; the RSA bonus received by the Minister of Agro-industry and the purchase of the wind companies of the Macri group, which acquired the investment fund that Nicolás Caputo's construction company also bought. The second instance court must resolve the appeal of the AFIP against the ruling party that exempted Angelici’s bingos from paying the increase in income tax. The trials for crimes against humanity in Mendoza and Jujuy are also resumed and the case filed due to the disappearance of the San Juan submarine will advance. The court will also have to resolve the challenges presented against the pension reform and the “de-bureaucratization" decree. At the same time, the Brazilian justice began investigating the payment of a 5 million-dollar bribe for the tunneling of the Sarmiento Railroad, which involves Marcelo Odebrecht and the governor of Minas Gerais.

  2. Foreign policy has played a central role during the last week of January and will continue so in the coming days, with the visit to the country by the US Secretary of State on February 3. In Davos, Macri had 30% more meetings with front-line businessmen than in 2016 when he attended this same Forum. However, of all global leaders, he only met with Merkel. The visit to Russia left a positive balance in terms of possibilities, and the visit to France, a failure due to high expectations of achieving progress in the negotiation between Mercosur and the EU. The visit made by the US Secretary of State (Tillerson), takes place within the framework of a tour that includes Mexico, Peru and Colombia, as well as Argentina. Beyond the bilateral issues, on the first day he will visit the INVAP, - the state company from Rio Negro province that manufactures nuclear research reactors-, and on the second day, he will meet with Macri in Buenos Aires. It should be noted that when Macri was in Davos, it was reported that for the second time this company won the tender to sell a reactor of this type to the Netherlands. Previously, the company sold to Australia, Egypt, Algeria and Peru and plans to sell to Brazil, Saudi Arabia and Algeria again. With a certain prejudice towards a provincial state company, the Macri Administration suspended a contract for the manufacture of satellites that was in progress with Italy, -Italian President Mattarela also visited INVAP when he was in Argentina- and also the manufacture of radars that had already started. But the success of this company shows that in a long-term view, Argentina's project must have two pillars: agro-industry and science and technology. In turn, on February 15 President Macri will hold the "spiritual retreat" of his cabinet, prior to the re-launching of his government on March 1, with the opening speech of the ordinary sessions of the Congress.

  1. In conclusion:


  1. While government has decided to drop reforms to avoid Congress and political costs, the legislative approval of the “de-bureaucratization” decree will force talks again.


  1. The conflict with unions will be key in February and will be centered on the trials against Moyano for one, and the protest demonstration called for Feb 22, along with the discussion on the collective bargaining agreements.


  1. The end of the legal fair revives a series of cases affecting Kirchnerism; the Anti-Corruption Office considers some allegations against government and Odebrecht’s bribes in Argentina are investigated in Brazil.


  1. Macri’s tour of Europe has thrown positive economic outcomes but somewhat disputable on the political front, as the visit of the US Secretary of State underscores the importance of INVAP.

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