Alberto Fernandez meets a month in power with the economy on pause

last December 10, Alberto Fernandez received a Argentina, who had returned to sinking: with the economy in recession for the second consecutive year, inflation

Alberto Fernandez meets a month in power with the economy on pause

last December 10, Alberto Fernandez received a Argentina, who had returned to sinking: with the economy in recession for the second consecutive year, inflation and poverty on the rise, and external debt unpayable. In his first month as president, Fernandez has closed deals with multiple sectors per 180 days, for a fragile pax economy with a fiscal adjustment that has been applauded by the International Monetary Fund and by the financial sector, and represents a short-term relief to the pockets more empty. The contractor has also begun to make their way in foreign policy: he took distance from the Group of Lime without leaving the block and gave shelter to former president of bolivia Evo Morales, who is campaigning from Buenos Aires to the may elections.

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Fernandez has achieved the parliamentary support sufficient to start with cuts we have not had too much opposition to the union. Pensions are frozen for six months, one of the biggest expenditures of the public coffers, in exchange of a compensation for retirements lower. In the same way, the Government seeks to postpone wage negotiations collective until the second half of this year.

"The Government has announced significant measures that aim to protect the most vulnerable, trying to stabilize the situation of instability that occurred in the last few months in Argentina, and all in a context in which the fiscal accounts are not affected", said on Thursday the IMF's director for the Western Hemisphere, Alejandro Werner. "We are moving in a positive direction", he responded during an interview with CNN.

The economic team argentina, led by Martín Guzmán, works in the renegotiation of the payment schedule of external debt, including the corresponding 45,000 millions of dollars disbursed by the IMF during the administration of Mauricio Macri. Experts anticipate that Argentina, which does not grow in this 2020, will not be able to comply with the schema-of-payments current.

The measures of cost containment have been linked to tax increases and restrictions on the purchase of foreign currency to take care of the reservations. The Executive had increased to 27%, in the case of soybeans, the tribute to the agricultural exports, the main source of income in dollars in Argentina. Those affected responded with timid movements, very much less than that checkmated the Government of Cristina Fernández in 2008.

The official currency remains stable against the dollar, which is changed to 63 pesos the unit, but argentinians who want to save in foreign currency or purchase them for leaving the country must pay a surcharge of 30%. The plane tickets and expenses with a credit card at the outside suffering from the same levy, a measure that penalizes those who had planned to travel abroad this summer austral.

Plan against hunger

Fernandez was put to the minister of Social Development, Daniel Arroyo, to the front of the National Plan Against Hunger. The Government will distribute nearly two million cards food that allow them to buy specific foods to the poorest households in the country. The rest of the argentine people must face, a rise of close to 8% of the basket after beating the VAT exemption approved last August. However, the current Administration has reflotado a program of the kirchnerismo, which fixed prices of around 300 products in mass consumption, for example, milk, flour, oil and rice. It also has slowed in immediate gains in the bills of light, gas and water, as well as in public transport and fuel.

The measures of shock of this first month, and the lack of prominence of the vice-president Cristina Fernández de Kirchner, have reassured the markets, which had responded with concern at the return of peronism to power in Argentina. However, its effects on the economy will become more obvious from march, when the country return to full activity after the holidays, and in particular in the second half, without all the patches that have been left on pause many times.

In the outer plane, Fernandez tears his mandate without allies in the Mercosur, dominated by conservative governments, in special the brazilian Jair Bolsonaro, and in the midst of a region in turmoil. The argentine president has ceased to recognize de facto the opponent John Guaidó as interim president of Venezuela, but has shown that there will be neither an ally unconditional Nicolas Maduro, whom he criticized for his maneuver to regain power in the National Assembly. On the contrary, it has given strong backing to the former president of bolivia, Evo Morales, to seek asylum in Buenos Aires since the 12th of December, from where he prepares a political campaign to allow his party, the Movimiento al Socialismo (MAS) beat in the presidential election next may 3.

Without the same public relevance, given the central concern for the critical economic situation, the Government has also shown a shift in social policies in keeping with the progressive agenda. The first measure of the minister of Health, Ginés González García, was to enact a protocol that regulates the abortion is not punishable, and Fernandez has anticipated that it will send to the Parliament an initiative for legalization. In Security, the minister Sabina Frederic has distanced itself from the heavy hand of its predecessor to repeal the protocols that gave more power to the police and has announced that it will consider legalizing the use and production of marijuana. The sectors most conservatives strongly oppose any step in this direction.

Updated Date: 10 January 2020, 22:00

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