BUENOS AIRES, Argentina – Argentine President Mauricio Macri only assumed office on December 10, but he is already facing resistance from various sectors of society including powerful unions concerned about changes he is planning or changes he has already made to the national economy
Macri, of the conservative Republican Proposal (PRO), ended 12 years of ‘Kirchnerism’ after he narrowly defeated Daniel Scioli of the governing center-left Front for Victory (FpV) in the two-candidate second round run-off vote.
The FpV, whose ideology is known as ‘Kirchnerism’ due to its association with the last 12 years of rule, first with Néstor Kirchner (2003 to 2007) and then Cristina Fernández de Kirchner (2007-2015), is just one of several factions of the big-tent Justicialist Party, which tasted defeat for just the third time in its presidential election history (1983, 1999 and 2015) as a split along internal lines between the FpV and conservative dissidents helped Macri to the presidency.
In the run-off vote, Macri won 51.4 percent of the vote while Scioli won 48.6 percent, a margin-of-victory that was considerably narrower than what was predicted. The narrow victory, coupled with the fact that the FpV still enjoys the largest presence in both houses of Congress and Macri’s ‘Cambiemos’ (‘We Are Changing’) coalition being an unlikely and uneasy alliance between his PRO party and the centrist Radical Civic Union (UCR), meant that the new leader was going to face an uphill battle in governing.
Seeing the odds against him, Macri has hit the ground running by making several changes during the honeymoon period. First, he named two Supreme Court judges by decree instead of vetting them through Congress (a decision he since rescinded), rolled back export taxes on beef and grains and removed currency controls which led to a 30 percent devaluation on the Argentine peso.
Macri argued that the devaluation was necessary in order to send a jolt into the economy via foreign investment but ordinary citizens were the first to feel the pinch as they saw their purchasing power effectively reduced by a third, a significant development with inflation already hovering at around 20 percent.
Given this development, Macri announced that his government would be seeking several multi-billion dollar loans from abroad, an act that, paired with other neoliberal economic measures similar to Macri’s, led to several major collapses and skyrocketing inflation in the Argentine economy during the right-wing military dictatorship of 1976-1983 and the terms of Carlos Menem (1989-1999) and Fernando de la Rúa (1999-2001).
“This has the smell of the 1990s,” said Hugo Moyano, the leader of one wing of the General Confederation of Labor of the Republic of Argentina (CGT), in reference that unstable economic period marked by neoliberal policies.
The CGT is the largest and most historically important labor union in the country and, like the Justicialist Party, has its internal factions. On one side was the ‘oficialista’ sector that backed the former government of Fernández de Kirchner and on the other side were the dissident CGT Azul y Blanco (Blue and White) and the CGT Azopardo (led by Moyano) unions, both that were in opposition to the former government.
Now, however, all three factions are united against Macri and have already taken to the streets to voice their displeasure with the currency devaluation and their members’ diminished purchasing power with the season holidays coming soon.
“The workers are not willing to lose purchasing power. This government has just assumed control and had no doubts about removing taxes on exports for large-scale, wealthy operations but they still have not mentioned anything about removing the perverse tax on the workers’ seasonal bonuses in spite of the steep currency fall,” Moyano said.
Alfonso Prat-Gay, Macri’s Economic Minister, declared during the electoral campaign that the removal of currency restrictions would “affect practically nobody” because people were still buying foreign currency in the black market where the exchange rate was higher than the official number. The Argentine consumer and the CGT disagree, however, and the union’s wings gathered to sign a decree that demands a year-end bonus for their members.
The sudden flood of dollars and euros into the market means that not only does the peso carry less weight after the devaluation, it also means that there will be more pesos than needed in the market which will lead to inflation, already high at around 25 percent and expected to keep climbing now well into mid-30s throughout 2016.
The Macri administration is rejecting the CGT’s proposal for an across-the-board bonus and is instead urging the different sectors within the union to individually negotiate with the respective companies in their fields. The CGT, however, pointed out that the companies were not responsible for the devaluation and diminished purchasing power, and as such, the government should take responsibility for something they created.
Prat-Gay responded that “if there are no agreements between the parties of the syndicates and companies,” then the government would “approve the measure” demanded by the CGT.
In spite of the Economic Minister’s words, unions across Argentina are worried that things will only deteriorate before they improve as several major companies have already laid off hundreds of workers for refusing a substantial cut in pay, although mining giant Techint moved to reincorporate the nearly 200 employees they laid off after the news was made public.
As a response to the upheaval, several groups of employees that were laid off from various companies blocked roadways, bridges and prominent boulevards in order to bring attention to their situations, and several major syndicates are planning a march and rally in central Buenos Aires, and several social groups have already blocked the monumental 9th of July Avenue in the capital in opposition to Macri’s economic policies.
Ever since the 1930s, there have been pro-government and dissident factions within major trade unions, and during Juan Domingo Perón’s years in power (1946-1955, 1973-1974), the unions became allies and power bases for various political figures. They were further split and later weakened by the said neoliberal reforms but the unions have still managed to remain powerful and politically important through the decades.
As such, the CGT and the Central Workers’ Union of Argentina (CTA), the second largest after the CGT, could make life very difficult for the Macri administration by repeatedly bringing the nation to a halt until its needs are met.