March 12, 2014
THIS YEARSunday, December 29, 2013
W44 to W52 - Almost as surprising as the metaphorsis of the Flores-born San Lorenzo fan Jorge Bergoglio into Pope Francis, supreme pontiff of the Catholic Church, was CFK’s U-turn on him.
W44 — Against most expectations, the big news buzz from this week is not the fallout from the October 27 midterm elections (a wholly predictable government defeat) but the Supreme Court decision two days later ruling the 2009 Broadcasting Law constitutional by a 6-1 vote — a clear defeat for the Clarín Group, which can nevertheless contest each subsequent step while the Supreme Court pointedly calls for a more independent AFSCA media watchdog. Meanwhile the bottom line of the midterm elections is a massive two-thirds protest vote against a government which paradoxically emerges with a working majority in both Houses of Congress. The elections themselves are basically a PASO rerun although with CFK absent this time and certain differences in the results — thus the Victory Front fares much better in Córdoba and much worse in Buenos Aires province, losing by over 11 percent. Massa’s win there is massive — the Victory Front can only hold four of the 24 Greater Buenos Aires districts, almost losing La Matanza. Elsewhere, Macri, Socialist Hermes Binner in Santa Fe and Radical Julio Cobos emerge as potential presidential candidates on a par with Massa — the FAP Broad Progressive Front alliance of the latter pair are runner-ups to the Victory Front third of the vote nationwide with 21 percent. UNEN’s Solanas shuts out the Victory Front in this city from the Senate by beating Daniel Filmus behind PRO. Boudou’s turn to claim victory on the night but greater moderation in CFK’s absence does not produce much better results.
W45 — Just as the government has now accepted its defeat in a more institutional atmosphere, so the Clarín Group heeds the Media Law by subdividing itself into six. A big player in this is Mexico’s Fintech (with a foot in both camps as a Clarín partner with strong government ties), to whom Telecom Italia is now sold. Yet Rossi announces the discovery of military dictatorship material on Papel Prensa which could be potentially used to revive the feud with Clarín. “N8” saucepan-bashing proves something of a fiasco since protest has already been expressed electorally — will it be the last in the series? Central Bank reserve losses hit 10 billion dollars for the year.
W46 — With a Cabinet reshuffle widely predicted, CFK’s return is delayed a week but the pending items are building up, especially in the economic sphere with the reserves now falling below 33 billion dollars. Both the Supreme Court and the Church successively urge more effective action against drug-trafficking and the controversial proposal arises from Massa circles to shoot down unidentified aircraft.
W47 — CFK returns with a “love me, love my dog” video which is rapidly followed by major Cabinet changes opening up a new chapter — Capitanich is the new Cabinet chief (and immediately meets the press) while Kiciloff is promoted to Economy Minister, replacing the five- (even seven-) headed economic team which had existed before, especially after Moreno is ousted the next day (replaced with Kicillof henchman Augusto Costa). These are only the biggest changes — Central Bank governor Mercedes Marcó del Pont is out too (replaced by Banco Nación chief Juan Carlos Fábrega) together with Agriculture Minister Norberto Yahuar while at a lower level Finance Secretary Adrián Consentino is a significant exit as a key link to the outside world under the outgoing minister Lorenzino. Kicillof has a Marxist image abroad and is widely seen as the mastermind of the YPF expropriation. The immediate results of the change are not positive because inflation picks up while reserves fall to 31 billion — the team’s first move against dollar drainage is to tax luxury cars. When swearing in the ministers, CFK briefly reverts to her old self with a demagogic harangue to youthful admirers on “deepening the model.” A big loser of all this seems Urribarri with the preference given Capitanich but only time will tell if the latter has peaked too soon.
W48 — The government has Vaca Muerta as its trump card in the long term but Kicillof as a Keynesian will know what Keynes had to say about the long term while the problems with fuel imports and subsidies are now — YPF and Repsol thus announce a preliminary five-billion-dollar compensation deal for last year’s expropriation. YPF CEO Miguel Galuccio and Pemex are key players here. The Senate clears the Civil and Commercial Code with misgivings while the Supreme Court is also unhappy — not least with the separate state civil liability bill (to minimize said liability). Massa and Scioli hammer out agreement on a 2014 budget for Buenos Aires province by dodging most of the issues. Father Juan Carlos Molina, a Santa Cruz priest close to CFK, fills a nine-month gap in SEDRONAR anti-drug agency and announces that he will concentrate on helping addicts. Celebrity Ricardo Fort dies at 45.
W49 — A Córdoba police strike creating a “liberated zone” for mass looting becomes almost nationwide by the end of the week with copycat mutinies elsewhere, only encouraged by the rapid pay settlement in Córdoba which threatens a domino effect for the public sector elsewhere. A blame game starts between national and provincial governments, stressing Governor De la Sota’s poor anticipation of the crisis versus delayed dispatch of the Border Guards — if the latter neglect was malicious, it should be read as more a warning to all governors than a bid to undermine De la Sota who is already one of various lame ducks after this year’s voting. But the real casualty of the crisis is Capitanich who has the most to lose after his rapid ascent and with his federal outreach (meeting Macri and Bonfatti that same week) in tatters. And the real culprit is the police who are the problem as so often, not the solution, with their suspected collusion with the looters and proven links with drug-trafficking. The political and social aspects of the looting are secondary and opportunistic (the looters are numbered in dozens and hundreds). In all this security crisis the appointment of a new Security Minister María Cecilia Rodríguez proves totally irrelevant — Berni calls the shots as ever but having an army officer as minister would be “too much” (in CFK’s pet phrase). In Santiago del Estero Zamora places his wife in provincial government house with a 64 percent vote (as against 73 percent in the midterms). In economic news, the credit card surcharge abroad is taken to its 35 percent limit and the exchange rate gap is narrowed by pressuring the “blue” dollar and accelerating develuation but November revenues lag behind all serious inflation figures — the root problem continues to be too many pesos and too few dollars (plus Brazil’s slowdown). Argentina is a lowly 59th out of 65 in the PISA (Programme for International Student Assessment) rankings and in South Africa Nelson Mandela dies at 95.
W50 — Despite mass looting, the 30th anniversary of continuous democracy remains the most important event of the week but much of CFK’s 10-point drop in the opinion polls this month could come from her dancing amid more than a dozen direct or indirect dead. Only this city, Formosa, Santa Cruz and Santiago del Estero (where basic police pay is 1,089 pesos) are spared the mutinies and looting. The police grievances over their outdated pay amid accelerating inflation are usually as reasonable as their blackmail methods holding society hostage are unreasonable — relative wages are clearly a problem in Argentina alongside relative prices. But crime pays and provincial police are assured massive hikes, taking their pay up to 8,500 pesos on average, while the looting subsides. Who now pays the bill — insurance? Massa is blamed but he is probably reconsidering his bid for municipal police after all this chaos. Across the water Uruguay’s Mujica speaks of a “power vacuum” here but the government enjoys some success in imposing its own agenda — the Senate Appointments Committee clears the promotion of the controversial Army Chief-of-Staff Milani despite human rights and embezzlement accusations against him while prosecutor José María Campagnoli seeking to probe the crony capitalist Báez is suspended. In other news, Kicillof spends half the week in China, Boca fans riot (upset over the pink shirts in their last match?) and Central Bank reserves actually inch upwards thanks mostly to Chevron, staying above the 30-billion mark.
W51 — Power cuts for many people, overtaking looting as the big issue, but the opposite for Milani whose promotion is steamrollered through the Senatae with a 39-30 vote. Plenty of people say what is wrong with Milani but we need to know what’s right. Why does CFK insist on one of the very few serving officers with a “dirty war” record, jeopardizing the political capital of championing human rights over the last decade in the process? Is it the military intelligence network he represents or simply knowing too much, is he the basis for the military wing essential to any Bolivarian regime or does the social role he proposes for the Army in poor neighbourhoods back up the Border Guards or does he even fit into plans to stay on after 2015? But at least the government shows impressive control of the new Congress since the controversial Milani promotion is an acid test of loyalty on a par with the pact with Iran at the start of the year. The random blackouts in a torrid week surely put paid to post-electoral “fine-tuning” of subsidies just as surely as the Once rail tragedy in early 2012 but the subsidies have risen an unsustainable 48 percent so far this year. Industrial demand offers no excuses (with car output 15 percent down in November) and the only reasonable suggestion by Capitanich of pre-announced rotating cuts to share the pain is promptly slapped down. In the short term better maintenance of the existing grid could fill the gap until capacity is expanded but the root problem is a perverse system of frozen utility rates (while inflation pushes up costs) which both encourages extravagant demand and discourages investment — it hardly even deserves to be called populism since the best-equipped households electrically benefit most. Báez seeks a court injunction to slap prior censorship on media covering his business dealings with the Kirchners and the Tucumán provincial supreme court’s reverses the acquittals of 10 of the 13 defendants in the Marita Verón white slavery trial.
W52 — Hot would sum it up.
See page 10 of this newspaper.