Contradictions and minor fights further complicate the Government in the face of inflation and social deterioration



The intern between Cristina Fernández, Sergio Massa and Alberto Fernández.
The intern between Cristina Fernández, Sergio Massa and Alberto Fernández.

The internal discomforts they can change their official office in a matter of hours. Alberto Fernandez lived in disgust the absence of Sergio Massa in a scheduled event with Axel Kicillof, in Lomas de Zamora, a district of weight in Greater Buenos Aires. He was on the agenda released to the media. the bummer later went to economics, when the President anticipated an imminent price and salary agreement between employers and trade unionists, which has not yet been finalized. In both cases, Contradictions, some minor fights and the risk of fueling expectations rather than concrete announcements were visible.

The game is repeated with greater or lesser intensity depending on the protagonists. It is true that the internal focus is now on the evolution of the agreement between Cristina Fernández de Kirchner and Massa. But still relegated, the other actor of the official society is still Alberto Fernández, whose wear is the outgoing data but not the only one from the altered institutional board. Everything, in a delicate context. The inflation figure and a report on the impact of the crisis on children and adolescents speak at this time of the deepening crisis.

The price escalation scored 7.4% in July and projects a number something minor but serious this month, according to works by private consultants so far in August. The release of the latest CPI was preceded by a UNICEF survey that dramatically translates the impact of the crisis: it points out that More than a million children and adolescents skip one of their daily meals, along with a worsening of their diet, as a consequence of the deterioration of their household income.

There are still no official data on the evolution of poverty in the first half of this year, although its worsening is evident. It is likely to be at the levels of the first half of 2021, which marked a 40.6% below the poverty line measured by income, and exceeds the second semester, which registered a 37.3%. In other words, it would reverse the expectation downwards. And it would consolidate the growing process of structural poverty.

That is the background signal of the inflationary processes. The current climb marks a 46.2% since January and a 71% YoY The CPI data for July was known last Thursday and, perhaps in an attempt to show a reaction, Alberto Fernández said in public that businessmen and union leaders were going to be summoned for an agreement that should “align prices and wages in the next 60 days.”

Argentine Economy Minister Sergio Massa signs with President Alberto Fernández at Casa Rosada in Buenos Aires, Argentina.  Aug 3, 2022. REUTERS/Matias Baglietto
Argentine Economy Minister Sergio Massa signs with President Alberto Fernández at Casa Rosada in Buenos Aires, Argentina. Aug 3, 2022. REUTERS/Matias Baglietto

The announcement was largely expressive of the state of affairs in the ruling party. Alberto Fernández said that the call would be made by himself and the “Minister Sergio Massa”. Formal. The immediate discomfort caused by Massa’s unexpected absence in Lomas de Zamora had already transpired, given that the insubstantial idea of ​​showing photos of unity and management is insisted on. In the circuit close to Economy there are questions about this communication scheme. Anyway, it seems clear that no one wants to have their agenda handled.

But there was in this case one more significant element. Alberto Fernández made an announcement that implies a very advanced stage of negotiations, when in fact there are contacts, but still without a guaranteed result. In any case, it will have to be seen if it is a formality, a declaration, apart from the history of failures with this type of formula. With an addition: anticipating a virtual fixing of prices without a precise date can only generate an opposite reaction. Something similar was questioned when Alberto Fernández announced a “war against inflation” without any basis.

Massa and his team seek to begin to specify some of their own initial announcements, which were guidelines rather than concrete measures. Otherwise, he might end up overreacting. And that’s a central point in terms of expectations. Economy highlights the steps to try to calm the markets. For example, the operation to transfer to next year giant maturities of debt in pesos, based on a very attractive mechanism tied to the evolution of prices or the dollar.

In the same way, From the beginning, the harmony and the bridges of the new head of Economy with Washington and with the IMF are highlighted. This is how his first international outing is marked, at the end of the month. It is not a simple matter, considering the contradictions and internal disputes in the ruling party regarding foreign policy and, in particular, the regional strategy.

It’s funny what happens. But it is clear that CFK He has his sights set on the minister with three portfolios and not so much on Olivos. He believes a more or less classic adjustment is inevitable and continues to imagine it possible to disregard costs, before Alberto Fernández and now Massa. But not everything is silent. Kirchnerism was in charge of hitting on the possible appointment of Gabriel Rubinstein as virtual Vice Minister of Economy. Next week, already with several days of postponement, the position would be defined.

Also for next week there was a substantive issue: the announcement about the new subsidy system. Kirchnerism ceded spaces of weight in that field. The changes in Energy were analyzed in two different ways, even complementary: a real advance by Massa and a calculated retreat by CFK in the face of the adjustment of electricity and gas rates. The advance made by Massa indicates the decision to go further than Martín Guzmán, who suffered especially in this area at the hands of Kirchnerism.

If there are no changes, the photo would show a little less than a third of users who did not register to maintain subsidies. And discounting the strip that maintains the social tariff, the majority – around 60%, according to specialists in the matter – would be recorded to maintain subsidies, but tied to the level of consumption. It is assumed that this step is made up of sectors of the middle class and lower-middle class.

We have to wait for the details, although it has already been said that this new scheme will be completed gradually by the end of the year. In such a way that the definitive impact would take place on the threshold of the electoral year. With an addition: what would the updating of rates be like, not only due to the removal or reduction of subsidies, but in relation to the inflation records.

This is a question tied also to speculation about the intention to “buy time” this year – for example, with measures such as calling businessmen and trade unionists – while inflation makes its own adjustment, with a brutal transfer of income. However, this is, strictly speaking, a central political test. That’s what it is all about.

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