Argentine Political Outlook (Mar-19-20)
Mar-19-20, by Rosendo Fraga
 
 

1. President Alberto Fernández assumes that the Coronavirus has not only become the priority of his government at this time, but can define the fate of his tenure. Surveys conducted by the ruling party show that 60% agree with the measures adopted by the government and 34% are against. On Monday, March 9, the Minister of Health (González García) said "I thought it was going to arrive later", acknowledging the initial underestimation of the pandemic. Two days later, the President signed the urgency decree establishing the "quarantine" for those who come from abroad and have had contact with infected people. On Friday, the Minister of Health denied that classes were to be suspended. On Sunday the 15th, the President through another urgency decree stepped up the measures, closing the borders for 15 days and suspending classes until March 31st, recommending that activity be reduced to the minimum possible. The problem is that in the next two weeks, the number of both infected and dead people will increase. This implies that these measures are likely to be prolonged or even intensified. The President's advisers believe that the pandemic is an opportunity for him to strengthen his political leadership, which had been put to the test by the role of the Vice President. 

2. The Coronavirus has displaced the renegotiation of the debt as a priority of the government after completing 100 days in office. On Thursday 12, the President denied that the deadlines to present the debt renegotiation proposal were to be postponed. The next day, the Ministry of Finance reported that the offer for creditors was presented in the week that begins on Monday, March 16, according to what was planned. At the end of the week, it was revealed that the government was postponing said presentation. This took place after days in which the country-risk rate grew significantly and the stock market decline was very steep. Although the ruling party argued that the global decline was the cause, Argentina's vulnerability worsened it. The government assumes that the Coronavirus will generate a negative impact on the economy and on the first day of the week, it studies measures to alleviate this effect, especially in small and medium-sized companies, which it considers to be members of its coalition. After four days of farming sector trade stand-by -which the ruling party characterized as "business lock out" - the relationship between the farming sector and the government will become more complicated. In the context of the global crisis, the price of soybeans and other products that Argentina exports are falling, while the effects of the drought have affected crops. The drop in the price of oil also complicates the economic outlook, given the importance attached to the exploitation of Vaca Muerta field. The maintenance of the price of gasoline generates political controversy and investors demand a "shield" for the sector. The drop in tax collection will be an inevitable effect and the government's expectation of having growth in the second half is moving away. 

3. The past week showed intense activity in Congress, a situation that is now slowing down in the second half of March, partly as a result of the measures taken against the Coronavirus. The ruling coalition obtained the definitive approval of the pension reform of judges and diplomats. It was a political victory that it can take advantage of if it manages to get two thirds in the Senate to fill the vacancies that will be opened. Some sixty judges and prosecutors have resigned. If they add to the unfilled vacancies -which are hundreds- some 30% could be filled. The President of the Council of Magistrates (Lugones) has said that with the resignations to come, the ruling party would have 50% of the positions to cover in national justice. The reform to dilute the power of federal justice (Comodoro Py) has been diluted by the influence of Kirchnerism that wants to limit it, preventing it from reaching Congress. The Executive sent Congress the document for the agreement of the new Attorney (Rafecas), which will test whether the ruling party achieves the two thirds of the senators present, necessary for the agreement. Faced with the bill of intervention to the Judicial Power of Jujuy, to allow the acquittal of Milagro Sala, which advanced in the Senate, the President has chosen to distance himself. The crisis caused by the Coronavirus has allowed the ruling party not to send the bill on abortion to Congress, whose approval remains uncertain in the Senate. The government's relationship with the media shows signs of tension. The president said that "honest judges who won't allow for pressures by the powerful or the media are necessary." 

4. Politically, the Vice President began her ninth trip to Cuba since the beginning of last year and Juntos por el Cambio suspended the first meeting of the leadership that Macri was attending. She said "I do not rule", taking distance with the Administration. But in the second line there are frequent conflicts between "albertists" and "kirchnerists", as happens in the energy area. She begins her ninth trip to Cuba to visit her daughter, who would soon return to the country. The governors, for their part, fluctuate between contact with the Vice President and the Administration, to seek solutions to the economic difficulties they face. In the primaries carried out in San Juan, Governor Uñac won by a wide lead over his predecessor (Gioja). The allegations that affect the current government are diluting. Last week, the Minister of the Interior (De Pedro) was acquitted in one case for the use of per diem. Of the pending trials by the vice president, only one is still ongoing (the roadway system trial) but would now be delayed due to the Coronavirus. The Juntos por el Cambio leadership was to meet at the beginning of last week, but divisions over Macri's presence led to its suspension. Meanwhile, the cases against the Macri Administration are moving faster. The Treasury Attorney General (Zaninni) promoted the judicial intervention of the Post Office, where one of the two most complicated cases against the former President resides. In turn, the Executive ordered an Audit on the performance of the Anti-corruption Office in the previous administration. 

5. To conclude: 

a) The president has decided to strengthen his political leadership based on an effective management of the coronavirus crisis, adopting drastic measures. 

b) This has put the issue of the debt renegotiation -which was a priority- on a back seat and raised the need for measures to attenuate the slowdown caused by the actions against the coronavirus. 

c) The ruling coalition achieved the final approval at the Senate of the pension reform system of judges and diplomats, sent Congress the official document for the new Attorney and postponed the issue of abortion. 

d) The vice president starts her ninth trip to Cuba to visit her daughter; some rifts emerge between ‘albertists' and ‘kirchnerists' in second line, and the Juntos por el Cambio summit is suspended.