April 23, 2014


Sunday, December 29, 2013

W20 TO W30 - The YPF-Chevron deal is a strategic government shift in the final runup to the primaries

Former military dictator Jorge Videla died where he belonge, in jail - according to our law, not his.
By Michael Soltys / Senior Editor / Economic Outlook
W20 — Ex-dictator Jorge Videla (87 like Martínez de Hoz and Thatcher) dies in jail where he belonged. Macri and Córdoba Governor José Manuel de la Sota decree press freedom in their jurisdictions against the rumoured takeover of the Clarín Group by the CNV Securities and Exchange Commission as both judicial reform and the Báez scam thicken the political atmosphere. Massa makes his first appearance as a dark horse at CFK’s side. The Cedin bonds (their target set at two billion dollars) seem to do the trick as a pseudo-dollar in bringing down the gap between the “blue” and the official exchange rate to 70 percent but ANSeS social security administration is also selling dollar bonds. Elsewhere on the economic front, Chevron show interest in Vaca Muerta, six heavyweight unions including UOM agree to a 24 percent wage increase and a court rules against fining independent inflation estimates.

W21 — The dollar whitewash bill clears the Senate 39-28 but the greenback inches up. The jobless have also increased this year by some quarter million. CFK increases child benefits 35 percent and deploys her militants to monitor price controls, which are scaled down to 300 products from 10,000. In other news, Macri’s press freedom bill is challenged in court and Iran announces extra-parliamentary approval of the AMIA “truth agreement” MOU 16 weeks after the event.

W22 — A “Y10K” decade of Kirchnerism (equalled only by Menem, 1989-99) is stridently celebrated — the ruling party’s reply to over a year of saucepan-bashing. Yet while calling for another “won decade,” CFK says she is “not eternal.” But if Báez money-laundering scams have clearly replaced “Soccer for Everybody” as the latest television trend, Kirchnerism is losing ground in other arenas too even if they only need the 40 percent they apparently have to win big in the upcoming elections. On that subject, CFK first starts paying attention to Lomas de Zamora Mayor Martín Insaurralde rather than a candidate closer to Scioli or her sister-in-law. Immediately after whipping through the dollar whitewash by a 130-107 vote, Lower House Majority Leader Agustín Rossi becomes defence minister, replacing Arturo Puricelli who goes to head the Security Ministry where the departing minister Nilda Garré — transferred to Washington as ambassador to the Organization of American States (OAS) — is perhaps seen as too soft on crime in an election year (the change only strengthens Security Secretary Sergio Berni, from Santa Cruz like Puricelli). Juliana di Tullio is the new Lower House whip. The judicial reforms are challenged in court and Buenos Aires province is hit by teacher strikes. Macri creates his own INDEC statistics bureau and the removal of the Columbus statue behind the Pink House is ordered.

W23 — Massa is suddenly becoming a major electoral force, seriously splitting the Victory Front in their Buenos Aires province stronghold and undermining Scioli’s 2015 presidential ambitions. The opposition remains divided (former economy minister Roberto Lavagna shuns PRO) but in this city UNEN unites a broad non-Peronist, non-PRO spectrum for genuine PASO primaries on August 11 with Carrió and Fernando “Pino” Solanas as leading lights. A strategic Supreme Court ruling quashes Ecuador’s 19-billion-dollar injunction against Chevron here. Buenos Aires province teachers accept a 24.5 percent pay increase and Cabinet Chief Juan Manuel Abal Medina appears in the Senate for the first time this month.

W24 — A new Sarmiento railway line disaster kills three and Randazzo (his promising Buenos Aires province midterm aspirations suddenly shattered) mutters sabotage while a huge question-mark is raised over the general policy of subsidies (also Aerolíneas Argentinas and soccer). As primary deadlines draw closer, Massa registers a Renewal Front without confirming his own candidacy (with Macri leaning his way) and Moyano joins De Narváez while his teamsters accept 26 percent. Judge María Servini de Cubría rules the Magistrates Council unconstitutional while CFK blasts 95-year-old Supreme Court Justice Carlos Fayt (mostly for that reason). Menem is sentenced to seven years in prison (he stays out while still a senator). Farmers start a five-day sales boycott. Schoolgirl Angeles Rawson is murdered, a case obsessing some news channels for much of the year.

W25 — Massa takes the plunge at the last minute as primary nominations close, doing what Scioli never dared, and emerges as the frontrunner with his post-polarization message (although his image trends centre-right since people remember that he entered politics in the 1990s with Eduardo Duhalde) — the election now becomes his to lose. CFK and Scioli are forced to cluster together around Insaurralde’s candidacy — Greater Buenos Aires mayors are now coming to the fore. The Supreme Court rules the Magistrates Council reform unconstitutional, to which CFK retorts on Flag Day that she would like to be a judge when her presidential term is up. Huge protests in Brazil draw million-strong crowds, pointing to major problems there.

W26 — CFK vacates the middle ground to Massa’s ragbag Renewal Front (which cuts a deal with Macri’s PRO for the province) by vacating it while Insaurralde is largely unknown — even within the pro-government CGT only Caló backs CFK so everything is going Massa’s way. All four Armed Forces chiefs-of-staff are changed with military intelligence chief César Milani the most significant as the new Army helm. Ricardo versus Ricardo —Lorenzetti and sons are allegedly the target of a probe by Echegaray’s AFIP tax bureau, although this is denied,, against the backdrop of a bill by ultra-Kirchnerite backbencher Carlos Kunkel to shift the judicial budget to the Magistrates Council. Formosa indigenous leader Félix Diaz visits Pope Francis in Rome.

W27 — A week without big news but with nagging problems. Perhaps the most visible event is Moreno’s disruptive behaviour at the July 4 reception of Washington’s departing envoy Vilma Martínez (who sums up Argentina as “complicated”). Meanwhile Moreno’s price freeze runs into snags, especially a wheat shortage. A train strike causes commuter chaos — the midyear bonus is given as the cause but Randazzo suspects a backlash to increased surveillance following the June 13 crash. Moyano presses the income tax floor as an issue, prompting CFK to complain about his “extortion.” Meanwhile in the background Massa is picking up labour support all the time.

W28 — Massa makes a major strategic shift, moving away from the middle ground to much stronger criticism of inflation and a third CFK term, thus squeezing out De Narváez as the main dissident Peronist. CFK (still with 37 percent approval ratings in Buenos Aires province) tries to defuse Massa by saying that she is “too tired” to continue beyond 2015 while Sicoli tries to move into the room left by Massa downplaying his original “continuity with change” message. Courts continue to harass the government — an arrest warrant is issued for former transport secretary Ricardo Jaime, bad timing just a month before the primaries, and Moreno is summoned over fining independent inflation estimates.

W29 — Chevron reaches a deal to join YPF in exploiting the “world-class” Vaca Muerta shale with an initial investment of 1.2 billion dollars. This transforms the oil debate, simultaneously depriving the government of any opportunity to indulge in nationalist rhetoric and the opposition of criticizing its isolationism. As if Chevron were not enough to convey the impression of a CFK administration tilting right, human rights groups lodge charges of Milani’s involvement in crimes against humanity in La Rioja and Tucumán during the 1976-83 dictatorship. Meanwhile CFK avoids the 19th anniversary of the AMIA attack by visiting Colombia. Jaime stays on the run until the arrest warrant against him is quashed. The Massa campaign edges back to a more centrist position of “post-Kirchnerism.”
W30 — With the help of CFK and Scioli in a quiet campaign, Insaurralde starts catching up on Massa, who tones down his criticisms yet further, saying that the current situation cannot be compared with the crises of 1982, 1989 or 2001. CFK’s help extends beyond the verbal to hike the minimum wage 25 percent and declare the midyear bonus tax-exempt. The prestigious CELS puts a further spanner into Milani’s works by confirming human rights charges while his personal fortune starts becoming an issue and his promotion by the Senate has to be postponed until December — CFK opposes any “public lynching” but her choice of Army commander already seems a serious miscalculation. Macri launches his Metrobus. Abroad the new global superstar Pope Francis meets with CFK (who has Insaurralde in tow) at the Catholic world youth congress in Rio de Janeiro, Gerardo Martino becomes Barcelona soccer coach and the British Royal Family has its first great-grandson — “Boy George.”

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