The most disturbing question that has no answer
When and how will we get out of this double political and economic crisis? No one seems in a position to answer this question with certainty.which keeps most Argentines awake, crosses the gap and matches them with rising uncertainty such as inflation and the dollar.
For many, the near future intuitively appears as a series of sepia images of the past before and after the return of democracy. Alternate frustrated economic plans; changing of ministers; defaults, currency (or bank) runs; maxidevaluations, inflationary flare-ups (and hyperinflations); changes of monetary sign with removal of zeros; more poverty; downward social mobility; proliferation of union strikes and even presidential mandates ended before term. For others, who turn to books, every crisis is an opportunity to mark a turning point and correct the dragging structural problems that led to the current decline; but they do not find leaders capable of reaching basic political agreements that allow them to start reversing it, based on a shared diagnosis and lasting rules.
Both positions ignore the fact that the current crisis is different from the previous ones. Not only because since the pandemic the world stopped being what it was, but because Argentina is going through unprecedented situations that rule out magic recipes and quick exits. Even more so, when it suffers the consequences of the strong changes produced in the last two decades at the political, economic, social and institutional levels.
Without a doubt, The greatest cause of uncertainty is the exposed fracture of the Government, camouflaged with the fragile political truce of the last two weeks. Despite her current tactical silence so as not to assume political costs, Cristina Kirchner is acquiring more and more centrality in the decisions of the Executive Branch. Either with endorsements and tacit vetoes to officials; or with actions aimed at continuing to increase public spending, such as the joint venture with wage increases of almost 70% – and review in November – for Congress staff, which will surely extend to legislators. Even the Casa Rosada lets it be known that the Minister of Economy consults the measures daily with the vice president before announcing them. Since it is not exactly a guarantee for economic agents, it seems like a way of sharing costs.
If all this reduces the room for maneuver and accentuates the political weakness of Alberto Fernández, Even more unusual is that the Government and Kirchnerism now coincide in massively accusing Martín Guzmán, the opposition, the main media, the economic establishment, the farm strike, and the soybean producers for “destabilization.” for delaying sales; as if it had not been more destabilizing than –before the truce–, the CFK itself harshly criticized AF’s management in public and with a microphone in hand, after successive public letters for months and voting against the debt restructuring with the IMF.
You have to go back a long way in time to find a government whose main opposition is headed by the same leader who was in charge of modeling it to win the presidential elections as a running mate and maintain its parliamentary privileges.
Another factor of uncertainty is the visible problems of the Frente de Todos to simultaneously address the demands of its allies in trade unionism and social movements without fueling inflation even morewhich is already above 80% per year and makes the slogan “People First” in the profuse official propaganda on radio and television implausible.
Very far from the 13 general strikes that Saúl Ubaldini inflicted on Raúl Alfonsín, the CGT is just now organizing a march for August 17 from the Obelisk to Congress, while awaiting the reopening of joint ventures to review the agreements reached four months ago and the usual funds for social works. On your side, under the threat of leaving the FDT, Juan Grabois raises a series of demands whose fulfillment would imply a reissue of the 1975 “Rodrigazo”. To such an extent that CFK left aside the universal basic salary (SBU) proposed by his son Máximo, to replace it with a “supplementary income” (a kind of IFE) to reduce indigence that would be covered with greater tax pressure, as anticipated yesterday the diary Page 12.
With greater or lesser intensity, these pressures show a vintage postcard. Unionized workers, once the “backbone” of Peronism, became less than a third (6 million people) of the labor force. And, therefore, a privileged minority with rights, like public employees (3 million) with extra benefits, within the universe of 20 million that is completed with informal workers, monotributistas and autonomous, much more punished by inflation . In fact, the now frozen SBU project aimed at 17 million people “without full employment” but without labor compensation. Another proof of K’s irrepressible vocation to attack the effects and not the causes of the problems to try to transform “the people” into votes and stay in power.
In this context, the fiscal measures announced by Minister Silvina Batakis have the character of an undeclared emergency. They seek to curb the overflow of public spending in recent months (mainly in June) and the issuance of pesos to finance it, rather than lower it in a sustained manner.
The cash budget format, where the Treasury only spends based on its monthly income, has already been used in the past by various governments given the need to show a certain fiscal solvency. It is manual, but temporary in scope, since during its application delays accumulate in payments to suppliers and contractors of the State and in the execution of public works. Even the Argentine Agroindustrial Council (CAA) has just warned about the existence of previous delays in the refund of VAT on exports in the sector.
Nor is the decision to amend the Financial Administration Law to include excess income of $600,000 million from state agencies, public companies and trust funds within this year’s budget programming., in order to reduce debt placement needs. For more information, the first measure of this type was through a decree law signed by Juan Domingo Perón in 1947, when he created the Unified Fund of National Government Accounts. With successive extensions and denominations (such as the FUCO) it was used by different governments for decades (even during the administration of Mauricio Macri) to avoid discretionary spending, not always with success. More than a new law, an article suspended long ago will probably now be activated to cover the AFIP, the PAMI, the Incaa and the fiduciary funds. On the other hand, another current law leaves Anses out of the single box, which concentrates almost half of public spending.
The unknown of both measures is how effective they could be with the main “boxes” in the hands of Kirchnerism. It’s not the only one. There are also doubts about the liquidity insurance and the rate broker provided by the BCRA for banks to buy Treasury securities maturing in three months. All in the midst of an inflationary and exchange rate escalation with a gap of 130% that erases all the forecasts of companies and consumers. And when there are still more than 14 months to go before the presidential election