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Economic strains

Argentina: Economic strains

On returning from medical leave in November 2013, President Fernández immediately implemented a reallocation of cabinet portfolios. Jorge Capitanich, who had secured re-election to the governorship of Chaco in October, was appointed Cabinet Chief. Axel Kicillof, hitherto a deputy economy minister, was promoted to head the Ministry of Economy and Public Finance, while his predecessor, Hernán Lorenzino, was appointed head of a team in charge of foreign debt negotiations. The Minister of Agriculture, Livestock and Fisheries, Norberto Yahuar, was dismissed and replaced by Carlos Casamiquela. Fernández also sacked the head of the Central Bank, Mercedes Marco del Pont, appointing Juan Carlos Fábrega in her stead. In December the President made a further cabinet change, dismissing Arturo Puricelli as Minister of Security and replacing him with María Cecilia Rodríguez.

Rioting and looting broke out in Córdoba on 3 December 2013 following an announcement that the provincial police had gone on strike. The police force there were demanding a 52% increase in wages, necessary, it was argued, to combat spiralling inflation (although the official inflation rate stood at 9.4% in November, the real rate was estimated to be three times as much). The violence was contained after the Governor, José de la Sota, agreed to a 33% increase in police salaries, and the strike was ended. The federal Government distanced itself from the social unrest; however, looting occurred in seven other provinces in the days that followed, and some 10,000 federal troops were deployed across the country in anticipation of further violence. In April 2014 the federal Government announced a debt rescheduling plan for the provinces.

Further strains on the economy became evident in January 2014 after the Government eased its strict controls on foreign exchange, in an attempt to increase foreign reserves, following a fall in the value of the peso. Henceforth, citizens meeting certain criteria would be allowed to purchase up to US $2,000 per month, and deposit the funds in Argentine banks, rather than buying them on the black market and storing them in foreign accounts or at home, as was common practice. The Government’s economic difficulties worsened in March when teachers’ unions across the country began industrial action in support of salary increases of at least 30%. The teachers returned to work at the end of the month after an agreement on pay was reached, but on 10 April a nationwide 24-hour general strike was organized by trade unions to demand similar wage rises. Public transport was suspended and roads were blocked during the industrial action, in which, according to the organizers, some 1m. workers participated. A further general strike was held at the end of August.

Juan Carlos Fábrega resigned unexpectedly as central bank Governor in October 2014, after President Fernández had criticized the bank for failing to halt the fall in the value of the peso. Fábrega was replaced by Alejandro Vanoli, hitherto head of the stock exchange regulator, who pledged there would be no further currency devaluations.

The ongoing economic crisis continued to undermine the popularity of the Government. The introduction of a supply law (ley de abastecimiento) in September 2014, imposing price controls and monitoring output by companies, was widely opposed by the private sector, which claimed that it would stifle an economy already adversely affected by high rates of inflation and a lack of foreign investment. Furthermore, the ongoing corruption case against Vice-President Boudou also damaged the administration’s reputation. Boudou was formally charged by a federal court at the end of June with taking bribes and business dealing incompatible with public office. The charges related to Boudou’s role in the purchase in 2010 of Ciccone Calcográfico, the printer of the country’s banknotes. Then, in the following month, the Vice-President was asked to answer questions in court about alleged irregularities in his purchase of a car in 1992.

President Fernández replaced Cabinet Chief Jorge Capitanich with Aníbal Fernández in February 2015.

In July 2015 the Congress approved the controversial ley de subrogancias, which allowed the Council of Magistrates to fill any vacant judicial posts on an interim basis. Opponents of the law accused the Government of attempting unduly to influence the judiciary. The Supreme Court in early November ruled that the law was unconstitutional.

Citation: Economic strains (Argentina), in Europa World online. London, Routledge. Retrieved 20 July 2018 from

The 2013 mid-term elections Debt ‘default’

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