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Macri in power

Argentina: Macri in power

Macri was sworn into office on 10 December 2015. His Cabinet included Susana Malcorra as Minister of Foreign Affairs and former President of the Central Bank Alfonso Prat-Gay as head of the newly merged economy and public finance portfolio. Prat-Gay was to lead the new economic team in charge of reviving the country’s deteriorating finances and securing access to international credit. To this end, one of the new Government’s first acts was to abolish the foreign currency controls imposed by the previous administration in 2011 and return to a single floating exchange rate. (The President of the Central Bank, Alejandro Vanoli, resigned the day before Macri took office following repeated criticism by the incoming head of state.) The Macri Government also reopened negotiations with the hold-out creditors (see Debt ‘default’ ) in January 2016; resolution of the impasse in April allowed Argentina to access much needed foreign credit. Macri also used an emergency decree early in the same month to overturn the controversial 2009 law limiting the number of licences that media companies were allowed to own. A new regulatory body was also established.

One of the main priorities facing the new administration was a reduction in the fiscal deficit. To this end, in early 2016 the Government made clear its intentions to reduce the public sector salary bill, and government representatives opened negotiations on wage restraints with trade union leaders. By the end of February at least 21,000 public sector jobs had been lost, prompting workers’ protests. In response, in April opposition senators, who enjoyed a legislative majority, approved a law banning any job losses in the public or private sector for 180 days. To avoid its passage in the Chamber of Deputies, in early May Macri responded by eliciting an agreement with business leaders not to implement job cuts for at least 90 days. Nevertheless, in mid-May the proposal was approved in the lower house. The following day Macri exercised his presidential veto for the first time, dismissing the legislation. At the same time, however, he announced increases to the minimum wage; earlier in the year increases to the income tax threshold had also been unveiled.

The Macri Government also ended subsidies on electricity bills in February 2016, and on gas and water costs in April. Under the Fernández administration, consumers had enjoyed generous subsidies on utilities. In some cases, gas tariffs rose by an average of 300%, prompting strong opposition from consumers. The new Government argued that the rises were necessary to be able to reform the energy sector, which had suffered from a lack of investment. At the end of June further demonstrations were held against the increases, and to demand pay rises. In July a federal court ruled that the increases in fuel costs were illegal as there had been no public consultation prior to the announcement. Although the Government appealed against the ruling, three days later it announced that a cap would be set on the price increases. However, in September the Supreme Court ruled that the increases could remain in place until a public consultation, beginning that month, was concluded.

Trade unions in the country mobilized opposition to the utility cost increases, as well as rising inflation, throughout 2016 and 2017. In August 2016 the main union confederation, the CGT, merged its three main factions better to oppose the Government’s austerity measures. At the beginning of the month, in an attempt to appease social protests and secure support from regional governors for its legislative agenda, the Government announced extra funding for provinces. At the same time, a health care reform was unveiled that would provide financing for union health insurance schemes. None the less, social discontent continued, as did efforts in the opposition-controlled Congress to approve legislation increasing wage levels and unemployment benefits. In late November the Government reached agreement with opposition parties to pass a law allowing more funding for social programmes and job creation. The concession allowed the administration to gain legislative approval for its 2017 budget, which was duly passed on 30 November. However, at the end of December, faced with a still struggling economy, Macri announced the departure of Prat-Gay from the Cabinet and also the separation of the economy and public finance portfolios. Nicolás Dujovne took charge of the latter ministry while Prat-Gay’s deputy, Luis Caputo, was appointed economy minister.

Protests by trade union members continued in 2017, and in early April the CGT organized a one-day general strike in support of salary increases. One week later teachers staged a protest in the Plaza de Mayo in Buenos Aires to demand a wage rise in line with inflation. On 20 April President Macri reached agreement with regional governors on alignment of provincial and federal energy policy, a significant achievement in the Government’s pledge to reform the energy sector.

Tensions between the Government and the opposition-controlled Congress remained high, nevertheless. In November 2016 the Government suffered a significant legislative defeat in its attempt to introduce electoral reform, one of President Macri’s campaign pledges. The Senate rejected a proposal to introduce an electronic voting system, among other reforms, which was intended to increase transparency in the electoral process. Then, on 6 December, the lower house approved an opposition-introduced measure to increase the income tax threshold by 40%. The FPV argued that high inflation had meant that many poorer workers were paying income tax. The Government reacted by threatening to reduce funding to provincial governments.

In May 2017 Jorge Faurie was appointed Minister of Foreign Affairs and Worship after Susana Malcorra resigned for personal reasons. Malcorra was credited with raising Argentina’s role on the international stage and implementing a more outward-looking foreign policy.

Citation: Macri in power (Argentina), in Europa World online. London, Routledge. Retrieved 18 January 2020 from

The 2015 elections Corruption cases

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