If the “Let’s Change” label of President Mauricio Macri’s ruling coalition owes its name to the professed aim of doing politics in a different way, Macri’s first year in office featured a surprisingly harmonious co-existence with the two most traditional pillars of Peronism — organised labour and inland provincial governors. The general strike earlier this month made official the growing rift with trade unionism — the relationship with the provinces is not so obviously tense (Macri met the governors once again this week with all lines of dialogue apparently open) but the potential for conflict is beginning to multiply.
Some of this potential is more visible than other areas — not least the hottest issue of recent weeks, the teacher strikes, where the Macri administration’s refusal to hold collective bargaining at nationwide level has effectively left provincial governors holding the baby, often to their great discomfort. One big difference with 2016 is this October’s midterm elections. Outside the Buenos Aires half of the country (city and province), Macri’s coalition only runs three provinces (and might well have problems holding onto at least one of them, Corrientes, where this year’s first voting will be held in June) — all the rest are governed by opposition (usually Peronist) parties, which will now be obliged to compete electorally with Let’s Change. The Macri government could never have achieved its cozy relationship with Senate Majority Leader Miguel Angel Pichettto without a basic understanding with most governors but that could soon change. One of the chief electoral weapons will be public works and housing projects and here the Macri administration is believed to be planning a move likely to antagonise governors — just as in her time previous President Cristina Fernández de Kirchner channelled funds directly to Greater Buenos Aires mayors, thus bypassing then Governor Daniel Scioli, so the Macri administration will reportedly bypass governors by dealing directly with the contractors. The main excuse presented by the private sector for the lack of economic growth is a heavy tax burden and the government proposes to tackle this grievance in at least two ways which might irk the provinces. Firstly, top of the list for specific cuts is the gross earnings tax, a huge percentage of provincial revenues. And secondly, the most basic route to tax cuts is reducing the size of the state and almost two-thirds of Argentina’s 3.5 million public employees are provincial.
This potential tension with the provinces is not unimportant because while most media tend to focus on if or where the likes of Elisa Carrió or Martín Lousteau will be running, no less than 80 of the 127 Lower House seats up this October will be decided outside the Buenos Aires half of the country. For that very reason the government (which cannot be totally blind to this factor) might be inclined to postpone some of these potential clashes but there is definitely conflict brewing in federal relations.