December 18, 2017

2016 in review

Friday, December 30, 2016

That was the year that was

The year that was, as seen through the Herald’s front pages.
The year that was, as seen through the Herald’s front pages.
The year that was, as seen through the Herald’s front pages.
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By Michael Soltys / Senior Editor
Readers with long memories might recall my saying almost a year ago that I had written my last “That Was The Year That Was” — after three decades covering the Alfonsín, Menem and Kirchner eras, I had no intention of starting on a new period I was unlikely to complete. But circumstances decided otherwise. So without any further ado, here goes.


WEEK 1. The “band on the run” — the three convicts implicating former Cabinet Chief Aníbal Fernández in the 2008 General Rodríguez triple murder who absconded in late 2015 — remain the main news story until their final recapture (prematurely announced by President Mauricio Macri) by J11 and in Santa Fe not Buenos Aires province, where the manhunt was a shambles. But Macri remains comfortable enough (apart from having a rib cracked by his daughter Antonia) since he can rule by decree in the absence of Congress — including the replacement of the Kirchnerite media watchdog AFSCA with his own Enacom.

The economy stays calm despite the currency liberation, devaluation and consequent inflation (with no INDEC statistics bureau to measure it). Former Kirchnerite tax chief Ricardo Echegaray becomes Auditor-General, the Federal Police is transferred to City hands (J5) and Renewal Front leader Sergio Massa replaces run-off runner-up Daniel Scioli on Macri’s Davos forum invitation list. State streamlining includes axing 2,000 Upper House jobs with the approval of Senate Majority Leader Miguel Angel Pichetto (Victory Front-Río Negro).

W2. Macri has barely lived down the prison break (where he admits to errors) when the arrest of Jujuy Túpac Amaru social leader Milagro Sala weaves an increasingly tangled web which persists until today. The Buenos Aires provincial budget expanding debt by 60 billion pesos (with 10 billion pesos earmarked for mayors) is approved J14, splitting the Victory Front in the process.

The first meetings to end default begin with the “vulture” funds demanding up to US$10 billion and trying to hush the talks by making non-disclosure an issue. Finance Minister Alfonso Prat-Gay promises an updated income tax floor for the first time this year, forecasting a 2016 inflation of 20-25 percent — he also irks the opposition by speaking of “fat” in the state sector. Future 200-peso and 500-peso banknotes are announced. Sol airline goes bust.

W3. Macri is all the rage at the World Economic Forum in Davos where he even talks with British Prime Minister David Cameron and is quoted as using the word “umbrella” for the Malvinas sovereignty issue — but at the same time the International Monetary Fund is forecasting a one percent economic contraction for Argentina this year, while Amnesty International criticises Sala’s arrest as criminalising social protest, calling for her release.

Meanwhile, back home there are power cuts and blackouts amid a heat wave. Macri again resorts to decree to quash a parting shot by his predecessor Cristina Fernández de Kirchner to extend the 15 percent federal revenue-sharing refund ruled by the Supreme Court for three provinces (Córdoba, Santa Fe and San Luis) to all.

The first anniversary of the death of special prosecutor Alberto Nisman (who sought to link CFK to the 1994 AMIA Jewish community centre terrorist bombing) is marked with a demonstration.

W4. The Macri government plays hardball — in a month of power cuts Energy Minister Juan José Aranguren announces “tarifazo” utility billing increases of 500 percent (except for the “social tariffs” — some 20 percent of the clientele) in order to avert a collapsing grid and phase out subsidies which have cost US$51 billion since 2003. At the same time several thousand public-sector jobs are cut. These and other issues spark the criticism of Massa, anxious to shed the image of a Davos fellow-traveller and rebound as an opposition leader.

The protests against the arrest of Sala (now also accused of embezzlement) continue. Macri has no time for Grandmothers of Plaza de Mayo leader Estela Barnes de Carlotto, who has to settle for a “tense meeting” with Cabinet Chief Marcos Peña.

City Hall receives a huge federal revenue-sharing hike a week after the 15 percent refund for all provinces is quashed. The Central Bank obtains a US$5-billion loan from private banks to tide over reserves.


W5. Peronism’s 19th nervous breakdown as the Victory Front Lower House caucus splits up with over a dozen defections and Macri’s fears of a hostile Congress start fading rapidly as a quorum moves within reach — at the end of the week Macri is already calling extraordinary sessions in the Senate at least to confirm the Supreme Court nominations of Horacio Rosatti and Carlos Rosenkrantz the proper way (after last year’s decree).

Only the previous week Macri’s honeymoon had seemed to end with the tarifazos and now resumes with this daylight in Congress. The provincial dependence on the central government perfected by Kirchnerism now plays into Macri’s hands, enabling him to make inroads among inland Peronists — Pichetto’s Senate has already shown the way here. A demoralised Peronism (now divided into four caucuses, including Massa’s Renewal Front) calls a Congress for F24 to replace Jujuy ex-governor Eduardo Fellner (roundly defeated last October) — Scioli harshly criticises the disunity but CFK stays mum. The new scenario leads to thaws at other levels — Peña meets with Túpac Amaru (who lift their seven-week protest) and Justice Minister Germán Garavano with Attorney General Alejandra Gils Carbó (a pet Macri target for removal most of the year).

The Italian holdout creditors (once 180,000 but reduced to 50,000 by bond resales and and deaths among the many pensioners) settle on the basis of full principal and half interest (US$1.34 billion in total) while a blanket offer of a 25 percent haircut is made (how does this fall within Manhattan judge Thomas Griesa’s pari passu ruling of equal treatment for all creditors?) In other news, the official exchange rate surrealistically tops the “blue” dollar for the first time.

W6. Macri turns 57 in Córdoba F8, the third presidential birthday running in the shortest month of the year after both Kirchners — he hosts the Rolling Stones the same week. Export duties on mining are lifted F12. Soaring prices are the big public concern (in the absence of INDEC Macri’s own City Hall clocks in 4.1 percent inflation for January) with various countermeasures attempted such as continuing the Kirchnerite Price Watch scheme in diluted form and even threatening to import beef from Uruguay — the twofold difference between retail and Liniers stockyard prices leads to perhaps the Macri administration’s first criticism of business. Macri warns that inflation will take two or three years to control.

On the debt front, while the iconic “vulture” Kenneth Dart settles, Entre Ríos Governor Gustavo Bordet becomes the first Peronist to openly urge an agreement with holdout creditors amid the general provincial appetite for international credit but Macri will also need to make more federal revenue concessions if he is to have the Senate (whose extraordinary sessions now begin) in his pocket — City Hall is unduly favoured over the provinces (including Buenos Aires, stuck on its Historic Reparation Fund of 650 million pesos for two decades).

W7. The income tax floor is doubled to 30,000 pesos gross monthly salary (the first raise in 30 months although it still leaves 70 percent of wage-earners paying the top rate) — all three main presidential candidates had made that identical promise during the campaign. At the same time family benefits are extended to all monthly incomes under 15,000 pesos, thus increasing the beneficiaries from 2.9 to 4.1 million children.

Meanwhile, Education Minister Esteban Bullrich drives a coach and horses through the 20-25 percent wage guideline by offering teachers 40 percent. The aim is clearly a good news week with the spin doctors prevailing over the economists. The government is also all over the place in its approach to pickets who are hyperactive over various issues including the release of Milagro Sala (who is given a rosary by Pope Francis) — a tougher attitude is taken by the Victory Front mayor of Merlo, who evicts 2,000 squatters. Statistician Graciela Bevacqua, a beacon of resistance to Kirchnerite data manipulation, is bounced from INDEC for her methodological purism slowing down the bureau’s overhaul.

Italian Prime Minister Matteo Renzi visits and the arrival of United States President Barack Obama here next month is confirmed. The Senate approves Martín Lousteau for the Washington DC Embassy but not Macri’s Enacom decree.

W8. Macri’s Roman weekend jaunt is a disappointment, only being granted a frosty 22 minutes by Pope Francis. Earlier in the week French President François Hollande visits and Macri now finds time to meet Carlotto just beforehand — Hollande offers to back Argentina’s OECD (Organisation for Economic Co-operation and Development) candidacy.

The agreement with holdout creditors is all but there with the top “vulture” Paul Singer climbing on board and teachers accept the Bullrich offer, thus ensuring the start of classes — two key elements to give a positive note to Macri’s state-of-the-nation speech to open Congress. But a disruptive ATE state workers strike turns the new picket protocols of the other Bullrich (Security Minister Patricia) into a dead letter.

Macri has a good week in the Senate which finally accepts his Enacom decree, as well as the one slowing federal revenue-sharing refunds. Prosecutor Ricardo Sáenz openly calls Nisman’s death a murder while former spymaster Jaime Stiusso (suspected of being a key figure in that mystery) quietly returns to Argentina.


W9. Macri’s maiden state-of the-nation speech lasts barely an hour in contrast to the four-hour tirades of his predecessor — blaming her inheritance constitutes about half of it. Progress towards the end of default dominates the week — Prat-Gay offers UD$ 11 billion in bonds after a 25 percent haircut if the deal is clinched by April 14 while Griesa lifts injunctions. The padlock and sovereign payment laws blocking the payment of holdouts have yet to be repealed but Pichetto is very much on board. All sides are keen to tap international credit — the national government to dodge austerity and the provinces to overcome their chronic insolvency.

Interest rates rise to 37 percent while the dollar hits 16 pesos as Macri is making his state-of-the-nation address.

W10. Ending default continues to dominate the news. The government is committed to gradualism in reducing the fiscal deficit and hence seeking debt because Macri’s main asset is his popularity which cannot risk austerity. The quest to end default is leading to a situation where the government cannot be true to its free-market principles and nor can the opposition (dominated by debt-hungry Peronist doves keen on bartering their votes) act like an opposition. The Victory Front demands a plebiscite on the issue. The talks with holdouts continue to progress but there are fears of mainstream creditors demanding pari passu equal treatment, even with expiry of the RUFO (rights upon future offers) clause. Labour rumblings — amid rumours of CGT reunification, an April 29 labour protest is announced and teamster Hugo Moyano calls for double severance to protect jobs.

W11. After a 20-hour debate the bill to repeal the legislation blocking settlement with holdout creditors clears the Lower House by a 165-87 vote. Macri marks his 100 days in office M19 with inflation still the biggest public concern. But a couple of high-profile news items — a video showing a group linked to Patagonian tycoon Lázaro Báez counting greenbacks in La Rosadita financial house and the eight-billion-peso oil tax evasion of Cristóbal López — bring the theme of Kirchnerite corruption very much to the fore.

The trade unions find doubling the income tax floor insufficient, demanding that the scales also be updated to keep workers out of the tax trap. Washington declassifies documents from the 1976-83 military dictatorship just ahead of Obama’s visit and Brazilian President Dilma Rousseff’s woes deepen.

W12. Obama flies down from Cuba M23-24 just before Easter. There’s a charm offensive (accompanied by such gestures as drinking mate and an inspirational First Lady Michelle Obama turning it on) and the confirmation of “shared values and vision” with Macri but no major announcements — over the central debt issue, Obama pleads that although an amicus curiae of Argentina in the litigation, the separation of powers prevents him from influencing Griesa. Obama’s attempt to convert the tricky timing of his visit (the 40th anniversary of the 1976 coup) into an asset by showing that the US has turned a page since its support for anti-Communist dictatorships in the last century largely fails — he is rebuffed by human rights groups and spends the anniversary itself (M24) in Bariloche while here tens of thousands march to the Plaza de Mayo. The New York Times calls for Sala’s release during his visit. Not much other news in Easter Week — 240 National Library employees are fired.

W13. The last day of the month sees the Senate clearing the holdouts bill by a 54-16 vote while tarifazos of up to 500 percent are announced as well as doubled bus fares (in the same week the UTA transport workers union secures a 29 percent wage hike). Macri’s maverick ally Elisa Carrió slams the utility bill increases as “brutal” as well as sniping against Daniel Angelici, Macri’s heir at the helm of Boca Juniors soccer club.

The UCA Catholic University shocks the nation by quantifying poverty at 32 percent of the population (a long way to go to Macri’s campaign promise of “zero poverty”) — state layoffs reaching five digits seem minor by comparison. After spending the Easter weekend with the British tycoon Joe Lewis (used by some opposition media to counterbalance the stories of Kirchnerite corruption in the mainstream press), Macri flies off to Washington for an international nuclear security conference and a second week running with Obama (among other world leaders).


W14. The global impact of the “Panama Papers” including the Macri surname among the offshore accounts exposed is perhaps more keenly felt in Argentina than in most places — in conjunction with prosecutor Guillermo Marijuan probing CFK for money-laundering (following on the successive arrests of former transport secretary Ricardo Jaime and Báez), it means that the two leaders of Argentina’s political divide both have image problems with graft and even in the same courtroom (Federal Judge Sebastián Casanello).

Macri’s tycoon father Franco takes the rap for the offshore haven accounts and the president repeats his electoral blind trust pledges (somehow not implemented yet) but the problem will not go away — any more than the snowballing perception of Kirchnerite corruption as whistleblower Leonardo Fariña talks (and talks and talks), linking the Kirchners to major public works contract beneficiary Báez. The attitude of Anti-Corruption Office head Laura Alonso in instantly knocking back the charges against Macri without any investigation only diminishes government integrity — meanwhile Lanús Mayor Néstor Grindetti (who managed City Hall finances during Macri’s mayoralty) is even more deeply implicated in the Panama Papers than Macri.

The drive against Gils Carbó loses momentum after thus being forced on the defensive (although Macri still wants her out) and union pressures for double severance now turn into triple. But Macri still manages to steer his media decrees through Congress.

W15. CFK appears in court on the same day (A13) a Manhattan appeals court upholds Griesa’s lifting of injunctions on the eve of Prat-Gay’s deadline — the latter’s bond issue to pay off holdouts has now grown from US$11 billion to US$15 billion. CFK’s court appearance marks her first return to the political limelight since leaving the presidency — she has little enough to say to Federal Judge Claudio Bonadio concerning charges of irregular dollar futures sales but plenty to the thousands rallying outside the courtroom despite heavy rainfall. She calls for a “civic front” and seems to look beyond the Peronist backbone of her previous ruling coalition (many of whom are helping Macri to pay off the vulture funds), including an appeal to Radicals.

While she thus distances herself from Peronism, the Justicialist Party responds in kind — its future leadership ticket headed by ex-governors José Luis Gioja and Scioli includes no La Cámpora youth CFK ultra-loyalist. Meanwhile inflation more in the 30-35 percent range than the 20-25 percent forecast unsettles labour, which fears for its real wages. The first big taxi-driver protests against Uber. The notoriously venal judge Norberto Oyarbide resigns with a full pension.

W16. The formal end of default with the holdouts paid US$9.3 billion in cash (A22) while all other creditors are now freed to collect.

At the start of the week Prat-Gay’s bond issue to fund this package is a formidable success — seeking US$15 billion, it draws offers of US$70 billion and finally takes US$16.5 billion at an average interest rate of seven percent.

The entire financial world sings the praises of the Macri administration with Singer at the forefront. But in his moment of triumph new trouble looms for Macri as a bill to freeze dismissals for six months and re-introduce double severance enters Congress — Macri blasts the bill as a proven failure since double severance “destroyed jobs” the last time it was in force (in fact the opposite is true since two million mostly private-sector jobs were created during that 2002-7 period although for reasons more to do with the world commodity boom than that legislation).

The business reaction is to demand tax breaks before either complying with this bill or investing (despite the end of default) — small businesses in particular often find that steeply higher utility billing places them on the brink.

CFK fails to gain momentum from her melodramatic courthouse rally the previous week as she is snubbed by half her Senate caucus. In other news, Auditor-General Echegaray starts coming under new pressures from graft accusations, bank clerks obtain a 33 percent pay increase and five youths die in a Costa Salguero rave.

W17. The A29 labour protest on the eve of May Day announced seven weeks previously is duly held — its success is ensured by zero transport and massive support across the labour spectrum with the rival strands of both the CGT (Moyano and metal worker Antonio Caló) and the CTA plus Kirchnerism joining in although the more right-wing labour leader Luis Barrionuevo pulls out at the last minute.

CGT reunification is confirmed for August. In midweek the Peronist majority in the Senate had already approved the anti-dismissal bill by a 48-16 vote. Macri responds with a youth employment scheme but is generally on the defensive — his personal popularity is down from 71 to 53 percent with his honeymoon long over.

Prat-Gay admits to 12 million poor in Argentina and Peña’s Congress appearance turns into an eight-hour grilling. Casanello starts a seemingly endless treasure hunt for Báez properties.


W18. A winter of discontent seems to be making an early start with the prices of both private goods and public services (including subway fares and petrol up 10 percent) rising — the Price Watch programme is beefed up. Things will be worse before they grow better, says Macri.

Union clout is evident both on the street and in Congress where Macri seeks to avoid having to veto the job protection bill by requesting an anti-dismissal pledge from business. Massa introduces the PyMes (small and medium-sized businesses) into the equation by pushing for the protection of their interests. Macri has now been overtaken in popularity by Vidal, who wants a better deal for Greater Buenos Aires.

Báez tries to draw fire from the Kirchners by naming Angelo Calcaterra, Macri’s cousin, as an important business partner.

W19. Macri gains some respite even though the big picture of a difficult transition is confirmed by City Hall’s shocking April inflation figure of 6.5 percent, pointing to annual inflation well over 40 percent.

Firstly, the anti-dismissal bill stalls in Congress, failing to obtain quorum as Massa denies support while Macri obtains the anti-layoff pledge sought from business for three months at least. And secondly, the legal woes of Kirchnerism mount. CFK, her economy minister Axel Kicillof and her Central Bank governor Alejandro Vanoli are all indicted in the dollar futures case; her Federal Planning minister Julio De Vido is likewise indicted over the 2012 Once rail tragedy; and the Hotesur case involving the Kirchner family’s shady Patagonian hotel business builds up.

There is a huge University of Buenos Aires (UBA) march for a higher budget while Rousseff is suspended from the Brazilian presidency on the same day (M12).

W20. The anti-layoff bill is passed by a 147-3 vote by the Lower House M19 and vetoed by Macri the next (symbolically at the revived Cresta Roja poultry plant), thus flirting with a general strike. The government thus visibly loses control of Congress as Peronists unite around a core labour issue but Massa also suffers the loss of his decisive position the previous week after government deputies call his bluff and permit quorum in anticipation of the veto, thus forcing the Renewal Front to vote in favour of the Senate bill and not its own more pro-PyME version.

The minimum wage is upped 33 percent to 6,060 pesos by the end of the year. Macri reaches agreement with the provincial governors on refunding their federal revenue-sharing arrears by the year 2020. He also nominates Foreign Minister Susana Malcorra as a candidate to be the next United Nations secretary-general.

The backlash against tarifazos is gathering steam with Patagonian injunctions and the plight of sport clubs and NGOs also drawing attention. Consumer confidence is down. In other news, it is Supreme Court Chief Justice Ricardo Lorenzetti’s turn to be Carrrió’s target, a big Italian trade mission visits and US human rights stalwart from the junta years Pat Derian dies.

W21. Even if the week is bisected by the M25 birth of nationhood public holiday, it contains a potential milestone whereby the government hopes to regain the initiative — Macri announces a “historic reparation” for some 2.4 million retired people whose pensions were not updated to inflation during many Kirchner years, to be funded by a tax whitewash. Some immediately suspect that the former might be camouflage for the latter, the real aim — others that Macri might be trying to distract attention from his US$18 million in the Bahamas just now coming to light (the President promises to repatriate the money M30).

The “historic reparation” (a 30 percent increase on average) is to be accompanied by a universal minimum pension for those outside all schemes while whitewashed tax evasion is to be subjected to fines of between five and 15 percent. Patagonian gas bill increases reportedly topping 1,000 percent are capped at 400 percent (500 percent for businesses). Inflation remains high, as does labour discontent — the CTA umbrella calls a strike against Macri’s anti-layoff bill veto (but not the CGT with Moyano more interested in AFA soccer management) while there are school, hospital and court strikes in Buenos Aires province.

Brazil’s new Foreign Minister José Serra visits and makes “Braxit” noises towards a more flexible Mercosur. Leandro Báez wants CFK to take more of the rap for his father. Pope Francis controversially meets firebrand Mothers of Plaza de Mayo leader Hebe de Bonafini M27.


W22. The emotion of announcing pension reparations and the tax whitewash seems too much for Macri’ heart because two days later he has a health scare, messily handled from a public relations (although happily not a medical) standpoint.

At the insistence of Carrió and the Radicals, acting officials are excluded from the whitewash. Carrió is also given a green light to go after Echegaray, who is placed on trial by Bonadio — some fear that this may antagonise the Peronists against the whitewash. Discontent continues to rise over the utility bill tarifazos which are taking inflation over 40 percent — some provinces are winning injunctions.

W23. The omnibus pension/whitewash bill enters Congress. All three leaders of the main Peronist splinters have misgivings — CFK calls the bill a “Trojan horse” while Massa and Diego Bossio heading the Justicialist caucus which defected from the Victory Front (both of them former heads of the ANSeS social security administration) oppose the sale of ANSeS shares. Radical leader Ernesto Sanz urges a deal with Peronism to ease parliamentary work but that is easier said than done with three or four fragments.

Macri launches what is to be a constant theme in coming weeks — optimism as to the year’s “second half.” Congress passes a bill to refund IVA value-added tax to pensioners on purchases up to 300 pesos. There are transport strikes and in a cold winter Aranguren’s continuing Shell shares are increasingly questioned. Macri and Moyano spar over AFA.

A fortnight after meeting Bonafini, Pope Francis turns back a Macri government donation of 16 million pesos to the Scholas Occurrentes educational foundation.

W24. A winter of discontent recedes when former public works secretary José López is arrested after chucking bags containing over US$9 million over a convent wall early on J14 (also overshadowing the 30th anniversary of the death of Jorge Luis Borges that day). “Not my money,” says CFK but it remains to be seen where her popularity (still standing at 25-30 percent) will go from here. The massive disgust is also shared by many Kirchnerites (López is obviously expelled from the party) — the Victory Front caucus immediately loses its Misiones members in both Houses.  Two days later Macri reaps the first benefits of the scandal as his omnibus bill clears the Lower House by a 162-76 vote while the Senate confirms Rosatti (60-10) and Rosenkrantz (58-12) for the Supreme Court.

The overhauled INDEC releases its first inflation figure of the year — 4.2 percent for May. Teamsters demand a 42 percent pay hike.

W25.  Curious role reversal in the Parlasur regional parliament — the Victory Front seek to expel the disgraced López immediately but Macri’s legislators frustrate the move prior to an investigation in order to prolong the agony. Further advances for Macri in Congress amid Peronist disarray from the scandal (half a dozen Movimiento Evita deputies quit the Victory Front as having “nothing to do with López”) — Congress votes 137-49 to lift De Vido’s parliamentary privileges to permit court raids on him, also passing a witness protection law. Macri feels sufficiently emboldened to announce political and electoral reforms. A good week after starting with an extremely lame Flag Day speech and ceremony in Rosario (hamstrung by tight security).

Ibar Pérez Corradi (suspected mastermind of the 2008 General Rodríguez triple murder) is apprehended on the Triple Frontier. 

Prat-Gay admits to 42 percent annual inflation but claims the dirty work has already been done — the teamsters (who had been demanding 42 percent the previous week) settle for 37 percent.

Macri secures Pacific Alliance observer status for Argentina but the United Kingdom’s Brexit vote in the same week (J23) is to change the world mood in the wrong direction.

W26. In an escalation of the Hotesur case, Bonadio lifts CFK’s tax secrecy while she is also included in the Baéz probe. Such judicial activism is presumably encouraged by a Magistrates Council decision in favour of an NGO audit of all corruption cases since 1996, arguing that there is a “social demand” for graft probes. On the other side of the political fence, Grindetti is charged over his offshore accounts as court cases dominate politics.

On the political front Massa is popular but shows little interest in co-opting Peronism as yet. The Senate approves the omnibus bill by a 55-11 vote with the national and provincial governments scratching each other’s backs — the provinces are assured the return of the 15 percent of federal revenue-sharing given to ANSeS in compensation for the privatisation of the since renationalised pension funds while the national government gains the right both to sell ANSeS shares and tap its guarantee fund. On the same day (J29) Rosatti is sworn in as Supreme Court justice.

INDEC reports three consecutive quarters of economic contraction, thus confirming recession, but they do not only punish Macri — they also correct the Kirchner data which confused nominal with real growth by denying inflation, reducing the growth from the “won decade” from 63 to 45 percent.

Macri ends the month at the Pacific Alliance summit in Chile where he seeks Mercosur’s inclusion (just days after his hosts win the Copa América at Argentina’s expense for the second time running).


W27. The “second half” now begins and is off to a good start in many ways — the historical milestone of the bicentenary of Argentine independence (J9) obviously helps (with almost all the governors in Tucumán for the event) while Pope Francis calls Macri “noble.” The opposition is also placed on the defensive when CFK is formally indicted (J6) in the dollar futures case with her assets frozen even if there is a widespread perception that this is an economic policy decision which should not be tried, good or bad.

Increasingly teaming up with Massa, Stolbizer lashes into Kirchnerite corruption and is labelled an “evil donkey” by CFK for her pains. Macri himself spends almost the entire week outside this city because ahead of the Tucumán bicentennial he is in Paris, Brussels (where he pushes hard for a Mercosur-EU free trade agreement) and Berlin where he generally goes down well (German Chancellor Angela Merkel is especially fulsome in her praise).

Labour hostility is kept at bay by granting two billion pesos for the alleged arrears of the union-run healthcare schemes. Yet clouds are gathering on at least one horizon — the huge tarifazo mass utility bill hikes are increasingly running into court injunctions and mass protests, thus making public hearings inevitable before any further progress. In other news, Carrió gets after Buenos Aires provincial police chief Pablo Bressi (an uncomfortable moment for Vidal).

W28. The coldest winter in 60 years ensures the domination of the energy pricing issue. There is widespread cacerolazo saucepan-bashing on Bastille Day (J14) — a form of protest hitherto only at the expense of CFK governments and revealing extensive middle-class animosity towards the government for the first time.

Aranguren’s tarifazos are clearly handing the opposition a chance to rebound on a silver plate — thus even the more centrist Massa is highly critical although his ally Stolbizer maintains her focus on Kirchnerite corruption (fed by Florencia Kirchner’s US$5-million bank safe deposit boxes). The Supreme Court refuses to come to Macri’s rescue by overruling or freezing any injunctions, merely requesting a government report on the situation, while lower courts argue that the government’s new 400 percent cap came too late after their injunctions to apply. Aranguren explains at length that the subsidies are unsustainable, Macri chides those who guzzle energy so that they can go barefoot in their flats while Peña points out that court injunctions are also blocking the “social tariff” but none of this is good enough.

 Meanwhile INDEC posts a June inflation of 3.1 percent and the unions escalate their talk of re-opening collective wage bargaining.

W29. Colder than ever. Still around the halfway mark in popularity ratings, Macri moves closer to “blood, sweat and tears” than at any time this year, vowing to “tell the truth even if it hurts.” And the truth is that Argentina is mired in recession with 40 percent annual inflation chewing up real wages and the best solution to the fiscal deficit (ending subsidies) stuck in court. So much so that Peña says that nobody should pay their gas bills until the issue is defined. Pundits see the government as less keen than the general public on CFK going to jail in order to splinter the opposition. Vidal goes one better and recruits San Miguel Mayor Joaquín de la Torre (long aligned with Massa until early this year) as her Production Minister, thus pointing to a “Peronist leg.”

In other news, Macri raps Santa Fe province for poor co-operation and FIFA feels obliged to intervene in the AFA crisis, appointing a “normalising” commission.

W30. The most visual news of the week is Macri’s Snapchat encounter with his AFA and media sparring partner Marcelo Tinelli, thus highlighting the social network focus of his government’s communication strategy (Tinelli was trolled prior to the semi-reconciliation) — not that CFK was ever averse to bypassing the traditional media for direct contact with the people.  More proof of this focus? Peña seeks to authorise the use of ANSeS data for “communication” purposes — CFK sees this as the first step towards a “police state.”

Back in the real world, Macri inaugurates the Rural Society’s Palermo farm show amid a warm welcome after scrapping most export duties at the outset of his presidency. While the legal battles over the tarifazos continue, the City subway hike is also frozen in court. Productivity becomes a theme and Macri chides organised labour (and also Prat-Gay for “too much ego”) as a Sarmiento railway line strike strands 350,000 commuters.

Mexican President Enrique Peña Nieto visits here following Peruvian President Pedro Pablo Kuczynski’s inauguration.


W31. US Secretary of State John Kerry visits and responds to the evident delays in economic turnaround and foreign investment by urging “patience” (echoes of Tom Shannon’s “strategic patience”?). Which is certainly needed with the persistent recession, not least from workers averaging 30 percent pay hikes amid 40 percent inflation — but Triaca rules out any new rounds of collective bargaining. Pope Francis expresses concern about unemployment although it is still in single digits.

Macri tries spending his way out of trouble by sending 66 billion pesos the way of governors and trade unions in one single day (A2), also including a universal health coverage scheme. Now it is the turn of electricity bill hikes to run into court injunctions (but water remains immune, strangely enough, even though much steeper) — there is another cacerolazo (A4).

Bonafini is found in contempt of court after defying a summons in connection with the Shared Dreams housing scandal, triggering a huge Plaza de Mayo demonstration — the problem is defused when she agrees to testify at Mothers headquarters and thus avoids arrest. Báez says that he feels “used” by CFK — the latter’s continued popularity ratings of around 30 percent show that the effects of the José López scandal are wearing off.

The Rio de Janeiro Olympics begin, culminating in a tidy crop of Argentine medals.

W32. The utility rate issue enters Congress, thus mushrooming into officially a political as well as legal problem. There is a huge social protest on Saint Cajetan’s Day at the same time that UCA Catholic University is estimating 1.4 million new poor. Teachers strike in Buenos Aires province. July inflation registers some deceleration at two percent but petrol prices remain frozen high while falling in the world.

Echegaray finally resigns as Auditor-General (A9) and is replaced by veteran Peronist Oscar Lamberto. The Senate approves the new AFI intelligence helm despite its dubious professional credentials. CFK and Scioli hold their first substantial meeting since last year’s elections. Macri handles the human rights questions clumsily in a BuzzFeed interview.

W33. The Supreme Court upholds the gas bill freeze pending a public hearing but for residential clients only (around 26 percent of consumption), not business — this still means an extra 20 billion pesos of subsidies from the government, who call the ruling “populist,” thus raising doubts abroad about legal security if the executive branch finds the top voice of the judicial branch to be irresponsible. The public hearing (here the Supreme Court was simply echoing Gils Carbó’s insistence the previous day) is agreed for September.

Meanwhile Congress has hauled in Aranguren to explain himself —a session strangely skipped by De Vido despite being Energy Committee chairman. Deprived of the chance to pin the blame on De Vido, Aranguren argues that energy subsidies can only continue at the expense of public works — elsewhere the government is already casting doubt on the five percent export duty cut promised for next year’s soy harvest.

Meanwhile the government is hit by scandal — Customs chief Juan José Gómez Centurión is suspended over graft allegations and questions are asked for the first time as to how Vice-President Gabriela Michetti came to have over US$50,000 in her home to be stolen some 10 months previously. Despite all this, inflation and crime still remain the uppermost public concerns. Buenos Aires mayors are limited to two terms in future.

W34. The CGT reunites (A22) but only 58 percent of unions attend the congress and even that limited base requires a triumvirate (two of whom are Renewal Peronist deputies) to represent the full spectrum — quite apart from three unions out of every seven, this reunited CGT also fails to include the jobless (whom INDEC quantifies that same week as 9.3 percent or 1.5 million), the informally employed and the pickets. The primacy of the income tax floor issue seems to separate the CGT from the rest of the working class. With Macri neither creating nor protecting jobs, the labour horizon continues to look precarious while too much unemployment is looking structural rather than cyclical. Teachers strike nationwide (A24). Yet all in all, there is a labour peace in contrast to the depth of the socio-economic crisis.

The public hearing on gas billing is set for September 16. Rosenkrantz is sworn in as Supreme Court justice (A22). The Gómez Centurión scandal festers on — the opposite of a win-win situation for Macri because if the charges are true, the scandal is obvious and if false, he is exposed as being unable to control his intelligence services.

In other news, the government overreacts to the everyday problem of threats against the President; the Macri presidency holds its first Council of the Americas (with a surprisingly low level of ministerial attendance and business enthusiasm); Macri launches an anti-drug plan; 28 life sentences are handed out in the La Perla human rights mega-trial; Peña is again grilled in Congress and a Kirchnerite “resistance march” in Plaza de Mayo is rained into insignificance.


W35. The week’s local news is largely overshadowed by Dilma Rousseff’s definitive ouster in Brazil and Macri’s absence at the G20 summit in Hangzhou, China (amid protectionist noises here on Industry Day). Dilma’s doom highlights that Macri (with 45-50 percent approval ratings) is still far more popular than such regional colleagues as Rousseff, Venezuela’s Nicolás Maduro and Chile’s Michelle Bachelet. The Federal March (S2) is a far more impressive “in your face” display of opposition to Macri than the pathetic “resistance march” the previous weekend, showing Kirchnerism to be losing ground. Another nationwide teacher strike.

 The prospect of almost zero inflation for August leads to conflicting views on price trends — within the industrial world whether future collective bargaining should hinge on past or future inflation, and within the economic team, as to whether inflation is already tamed (as claimed by a Keynesian Prat-Gay itching to reflate) or not (the position of Sturzenegger, whose forecast for next year’s inflation is “17 in 17”). Meanwhile Sturznegger’s second-in-command Lucas Llach proposes scrapping paper money altogether.

W36. The Supreme Court finally overturns the injunctions against the gas bill hikes, which the government now caps at 200 percent — but Macri still wants zero subsidies by 2019. Massa now starts attacking imports (even though these are actually falling). The discovery of barrels of pseudo-ephedrine at Ezeiza Airport leads to Security Minister Bullrich bashing Gómez Centurión.

A huge anti-crime demonstration is held in Rosario. A newspaper ad is lodged against Federal Judge Daniel Rafecas for alleged irregularities — not really the right forum to judge the future of a judge.

W37. Macri holds his mammoth Business and Investment Forum jamboree in the same week as the Herald turns 140 (S15), followed by the gas public hearing (S16) at the other end of the week and as the other side of the coin.  Two announcements (whose timing may not have been coincidental) help to brighten opening day — Aranguren finally shedding his Shell shares and official confirmation of 0.2 percent inflation for August (which might also reflect the depth of recession, however). The arrest of longshoremen’s union leader Omar “Caballo” Suárez (an extortionate factor in international trade) is also seen as a bid to send the forum a positive message. Macri is also careful to allay investor doubts about political continuity by including speakers from the non-Kirchnerite opposition (Massa’s protectionism is unhelpful here). Yet overseas investors also harbour doubts about the lack of structural reform to lower the “Argentine cost” and the five consecutive years of stagflation, which cannot be dismissed a a cyclical blip.  Overall, there is too much interest in how many concrete investments will result from this talk fest and not enough interest in creating global value chains with the visiting multinationals or otherwise boosting world trade. Yet the 1,500 CEOs in town for the forum by themselves carry enough clout to create a virtuous circle.

Meanwhile another Barrick gold mine cyanide spill in this week of all weeks is not such good news. The forum also leads to a wide-ranging agreement on South Atlantic co-operation between Malcorra and visiting British Foreign Office Minister Sir Alan Duncan, which proves controversial.  Meanwhile the 2017 Budget is submitted to Congress punctually (S15).

In other news, the biggest story is a Zárate butcher running over one of the thieves holding up his shop (Macri expresses sympathy with this vigilante behaviour).

W38. Macri’s week is dominated by the UN General Assembly in New York where he is hailed like a rock star — his extramural activities include cycling in Central Park and (rather more seriously) being unduly cozy with the Clintons. His brief maiden UN speech centres on such congenial issues for his audience as “zero poverty,” refugees and drugs — nothing on either Malvinas sovereignty or the AMIA terrorist atrocity, as in many previous Argentine presidential appearances. But Macri seeks to compensate for the absence of the Malvinas in his own way with an extraordinary gaffe whereby he claims to have inveigled the new British Prime Minister Theresa May into sovereignty talks during a brief encounter in a corridor — Argentina’s sovereignty claims are promptly reaffirmed by the Senate (whose provisional head Federico Pinedo is actually one of the most intransigent on this issue).

In other news, INDEC reports a 3.4 percent economic contraction for the second quarter and the CGT call a general strike but without setting a date.

W39. Now INDEC confirms the UCA poverty figure by setting it at 32.2 percent or 14 million — the statistics bureau also follows up its data for an economic contraction in the second quarter with negative growth of -5.9 percent for July. A higher poverty figure is easier for Macri to reduce but also increases the distance from “zero poverty.”

The idea of an extra Christmas bonus now enters the negotiating-table as the best way of heading off a second round of collective bargaining this year. Productivity is also an insistent theme without too many concrete proposals.

At the same time Prat-Gay drags his feet on Macri’s campaign promise to eliminate income tax on wages with the tacit support of provincial governors, who also stand to lose revenue. Sturzenegger unveils inflation-pegging.


W40. With crime the top worry according to public opinion polls and feeling the gaps from the provincial police purges earlier in the year, Vidal now asks for 6,400 federal officers to be transferred to Greater Buenos Aires, thus again pulling back the Border Guards from the frontiers. Macri confirms the suspension of soy export duty cuts with rebates for the 10 poorest provinces, a move meeting with general rural acceptance.

Following September’s public hearing, Aranguren simply goes ahead with the previous scheme of up to 400 percent utility bill hikes for residential clients and up to 500 percent for businesses. Haggling continues over the extra bonus with some provinces claiming that they cannot pay. Malcorra finally loses out in the race to become the next UN secretary-general. A coronary artery operation sidelines Carrió.

Around the region, Brazil’s new President Michel Temer visits, Venezuela’s Mercosur membership is on the line and Colombian President Juan Manuel Santos narrowly loses the plebiscite on his peace agreement with FARC guerrillas, only to see the pact earn him the Nobel Peace Prize at the other end of the week.

W41. Macri meets Pope Francis for the second time this year — nearly an hour on this occasion (officially to canonise the 19th century Córdoba gaucho priest José Gabriel Brochero) as against 22 minutes and better vibes but the image of a Peronist pontiff at odds with a pro-market government persists.

British Ambassador Mark Kent is summoned to the Foreign Ministry to explain routine military exercises in the South Atlantic — compensation for Macri’s Malvinas gaffe the previous month? Macri plugs the extra Christmas bonus but it is the turn of some businessmen to cast doubt on their ability to pay at the annual IDEA symposium in Mar del Plata.

W42. The CGT threat of a general strike is finally buried after four weeks of suspended animation as agreement is reached on a bonus of at least 2,000 pesos to be paid at the end of the year. In government eyes this bonus serves a dual purpose: to head off any further rounds of collective bargaining this year and ensure that next year’s starts on a clean slate with the gap between inflation and real wage increases supposedly bridged.

The political reform bill is passed by the Lower House — Macri is encouraged by this success to present a bill limiting the attorney general’s term to five years with retroactive effect so as to curtail Gils Carbó’s tenure as from next August. Stolbizer accuses Macri of trying to keep CFK out of jail for electoral reasons to divide Peronism (since the ex-president still commands around a quarter of the vote) — a strategy possibly aimed at steering the anti-Kirchner vote her way from the government. A march against gender violence draws a huge turnout.

W43. The Herald becomes a weekly (not to be confused with weakling), out every Friday.

Macri steps up the pressure on Venezuela in the same week Pope Francis hosts Maduro. The drive to limit Gils Carbó’s term collapses for lack of a parliamentary majority, including plenty of friendly fire over the arbitrary legal logic underlining the move. Halloween sees CFK returning to court, this time over the Báez public works contracts. Meanwhile a safe within a dragon statue in a gated community earns Scioli’s former Cabinet chief Alberto Pérez a court summons. A UN civil rights group presses for Milagro Sala’s release.

Good news and bad news on the economic front — the first stage of the tax whitewash brings in 4.6 billion dollars but INDEC shows September manufacturing output (the month of Industry Day) as plunging 7.3 percent. A triple femicide in Mendoza shocks public opinion.


W44. A good week for Macri in Congress — his public-private partnership bill clears the Lower House by a 151-77 vote (amended to ensure a minimum local content of a third among other changes but still crucial for beefing up public works investment) while the 2017 Budget is approved by a 177-58 margin. Congress rewards itself for these good turns with a controversial 47 percent pay increase. Electoral reform is going nowhere. The CTA stages a massive protest march. Meanwhile interest rates of 26 percent seem to combine the worst of both worlds — too high to reboot the economy and too low for savers.

W45.  Local news is quite literally trumped — orange is the new black with Donald Trump’s White House victory (in the electoral college at least, albeit with almost three million votes less than Democrat Hillary Clinton). Trump‘s protectionism augurs ill for farmers here while prospective higher interest rates for an “America first” dollar are bad news for the plans of Macri and Vidal to finance their fiscal deficits via debt. No Congress here because too many members go to the US for the electoral climax there. Brazil’s 3-0 World Cup qualifier humiliation then further eclipses local news. So what did happen here that week? Bonadio confirms CFK’s trial in the dollar futures case while Quebracho extremist Fernando Esteche mutters that any judge putting her away could be sentencing himself to death. Inflation moves back upward in October to 2.4 percent thanks to delayed utility billing.

Human Rights Secretary Claudio Avruj disputes the figure of 30,000 missing under the 1976-83 military dictatorship. Encouraged by Pope Francis (who meets with their leaders in Rome), pickets actively push their social emergency bill.

W46. Macri phones The Donald to put his future relationship with the US back on track but can only rally a minority of provincial governors behind electoral reform. In the wake of a huge picket demonstration (N8) headed by the CGT at the last minute instead of its CTA organisers, the Senate approves by a 45-13 margin the social emergency bill as drafted by opposition senators — this enjoins the government to create a million jobs among other requirements and seems more designed to provoke a presidential veto than anything else.

Meanwhile the government reaches agreement on the extra Christmas bonus with UPCN civil servants union but the whole cost of that bonus is around three percent of the Senate’s social emergency bill. Macri seems trapped in a syndrome of seeking a monetary fix while letting the deficit slide, thus crowding out the private sector, just like the 1976-83 juntas and the 1989-99 Carlos Menem presidency before him.

Last but not least, Canada’s Justin Trudeau visits — plenty of convergence between the two bookends of the hemisphere but Milagro Sala’s imprisonment is also placed on the table.

W47. Before Prat-Gay can present his own cautious income tax floor adjustment upping it by 15 percent (below the government’s own 2017 inflation forecast), Massa rushes in a demagogic bill to increase the floor by 60 percent to 48,000 pesos — Massa’s insurance policy of a rational constructive opposition seems to be losing ground. Government hopes of postponing the income tax issue until next year and limiting Congress to ordinary sessions thus fade.

The income tax floor issue is also complex for the government because the two traditional pillars of Peronism, the trade unions and inland governors (both wooed by Macri with some success) are on opposite sides of offering relief. But while outmanoeuvred in the Lower House, the government moves to head off the Senate’s social emergency bill — Social Development Minister Carolina Stanley cuts a 30-billion-peso deal with picket leaders. The government is thus caught between the two fronts of the formally and informally employed with their respective income tax and social emergency demands but can also divide the two. Meanwhile Pichetto places electoral reform on the backburner. But there are also some positive announcements for the government — the second stage of the whitewash reaches US$21.86 billion and unemployment dips to 8.5 percent. Yet encouraged by Trump’s success, the Argentine Industrial Union (UIA) is increasingly explicit in advocating protectionism.

In a busy week Japanese Prime Minister Shinzo Abe visits at its start, Carlos Fayt (a Supreme Court justice for over three decades, starting at retirement age) passes away at 98 and at the end the week (far more noticed by the world at large) Cuba’s Fidel Castro also dies at 90.

W48. For the second time this month local news is overshadowed by events abroad — Castro’s death (N25) and the poignant plane crash of Brazil’s Chapecoense soccer team on the eve of a continental final while Argentina’s first ever Davis Cup in tennis won away in Croatia also creates a considerable buzz.

The Senate passes the 2017 budget by a 59-8 margin right at the close of ordinary sessions but the Lower House fails to convene. Haggling over the income tax floor continues. The dollar tops 16 pesos. One development receives little attention but could be important — Resolution 6105 permits banks to buy Treasury bonds, thus potentially crowding out the private sector.

One paradox remains constant throughout the year — Macri and CFK account for virtually 100 percent of the bad news between them yet continue to command 75-80 percent support.


W49. In a three-day week the 75th anniversary of Pearl Harbor (D7) proves a day of infamy for Macri — the opposition converge around Massa’s bill after defeating Prat-Gay’s initiative by a 144-88 margin the previous day. But Macri (with 130 mayoral vetoes under his belt) shuns a second presidential one. Peronist unity is now a concrete prospect, thus gainsaying Lower House’ Speaker Emilio Monzó’s strategy of broadening the ruling coalition to include Peronist groupings within a couple of days of the generally lame Chapadmalal weekend spiritual retreat where the idea was advanced — unlikely to repeat his 2016 political and parliamentary successes in an electoral year, Macri will need the economy to click more than ever in 2017.

A short week is further abbreviated by almost continual traffic chaos during the few working days (despite eight years of falling auto industry output) — not only does almost unanimous passage (227-1) of the new social emergency bill based on the agreement between Stanley and the pickets fail to calm the latter but there is a midweek subway strike after an employee is electrocuted.

W50. Since both Prat-Gay’s income tax bill so gratuitously presented to the extraordinary sessions of a hostile Congress and Massa’s opportunistic initiative are unsustainable alternatives, the Senate now has the last word. Its first instinct is to pass Massa’s bill and force Macri into the dirty work of a veto, thus having the best of both worlds (avoiding the political odium of rejecting the other half of Congress and also any revenue losses for provincial governors) but Peña heads off this strategy by calling their bluff and informing them that there will be no veto.

Mining provinces are also unhappy with the return of export duties to that sector proposed by Massa’s bill while others feel that its financial levies will do more to penalise savings than speculation. The Senate then proposes more dialogue to achieve consensus — these consultations are rapidly limited to the CGT and the provincial governors because everybody wants to wrap up this issue before Christmas.

Political one-upmanship is the name of the game, not any interest in a fiscally responsible and socially just solution within a comprehensive tax reform. Just like in so many previous years, the government tacks on an extra 122 billion pesos to the recently approved budget. Macri hosts Bachelet and Chile’s entire Cabinet at the close of the week but Venezuelan Foreign Minister Delcy Rodríguez is made far less welcome. In other news, Kirchner family assets are placed under court trusteeship and Milagro Sala’s first trial begins

W51.  At the start of the week the CGT and the government split the difference between Massa and Prat-Gay at an income tax floor of 37,000 pesos gross monthly pay, a decision rubberstamped by Congress (by votes of 56-2 in the Senate and 167-4 in the Lower House) — provincial governors are guaranteed against any revenue shortfalls via ATN Treasury remittances. The CGT is rewarded by being invited to a pre-Christmas reception by Macri, despite a savage transport strike on the same day as the negotiation (D17).

Aerolíneas Argentinas president Isela Costanini resigns (the first of Macri’s CEOs to bite the dust) —subsequent events are to suggest that this is not limited to the airline but points to a seismic shift within the Macri administration. The Science Ministry is occupied for much of the week but a partial retraction of the budget cuts ends the protest for now. In London an Anglo-Argentine agreement is reached on renewing mainland flights to the Malvinas. The Supreme Court halts work on the Néstor Kirchner and Jorge Cepernic hydro-electric dams pending an environmental impact study — apart from the delay to these Chinese-financed mega-dams, Argentina is not subscribing to China’s claims to be a “market economy.”

W52. See page 25 and elsewhere in this newspaper.   


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Edition No. 5055 - This publication is a property of NEFIR S.A. -RNPI Nº 5343955 - Issn 1852 - 9224 - Te. 4349-1500 - San Juan 141 , (C1063ACY) CABA - Director Perdiodístico: Ricardo Daloia