Hundreds of Argentines marched on Saturday in several cities under the slogan ‘Let’s defend the Republic’ on Independence Day.
(Alberto Fernández: ‘If they keep screwing me over, I’ll quit and everyone f…’)
‘Argentina without Cristina’ was another of the slogans chanted by the protesters, alluding to Vice President Cristina Fernández de Kirchner, leader of a center-left sector of the government of Peronist President Alberto Fernández.
(Argentina: economic crisis affects even the preparation of sushi)
The also head of the Senate and former president twice between 2007 and 2015, maintains a struggles with Fernández, especially on how to face annual inflation that exceeds 65 percentone of the largest in the world, and a drop in the purchasing power of workers and the middle class that caused in 2021 a defeat of the ruling party in the mid-term legislative elections.
The massive protests, called by social networks under what was called ‘El argentinazo’, had Buenos Aires as their epicenter. The security of the Casa Rosada, seat of the Executive Power, had to be reinforced due to the tension between the protesters and the Police.
The massive outing on the streets was the end of a hectic week in which Argentines had to run to supermarkets, bakeries, shopping malls or wherever they could go to stock up quickly.
The previous Saturday a political bomb had fallen: Martín Guzmán, the economy minister, had suddenly resigned. And Argentines, long accustomed to financial chaos, knew that the current crisis was about to get worse.
So before the peso could crash when markets reopened and before retailers could jack up prices, they wanted to buy essentials as soon as possible.
It became a race against inflation. Precisely, Argentina’s parallel exchange rate, free from the government’s strict currency controls, fell 17 percent so far this week, prompting store owners to post signs announcing a 20 percent surcharge. at all listed prices.
The prices of mattresses and bicycles rose 18 percent in just one week, while televisions now cost 13 percent more and cell phone prices rose 8 percent, according to high-frequency data analyzed by the consultancy. Ecolatina.
This is added to the fact that the country already faces shortages of toilet paper and other items of perfumery and cleaning, slowed down by restrictions on imports. Coffee manufacturers had their import quota reduced and for this reason they warned that the supply, set for a maximum of 60 or 70 days, is in danger.
The scenario suggests that the perennial inflationary spiral is entering a vertiginous phase that will increase the pressure on the embattled President Fernández and cause more difficulties for a population that has been losing purchasing power for years.
Guzmán, although not the favorite of Wall Street, was seen as the guarantor of the government’s tenuous and crucial financial pact with the International Monetary Fund (IMF) to refinance a loan of more than 40,000 million dollars.
The country’s hard currency reserves are declining; its foreign bonds, which have just been restructured in 2020 after a third payment default in this century, are trading at only 20 cents per dollar, and the gap between the parallel exchange rate –at 295 pesos per dollar– and the The official exchange rate – at 127 pesos per dollar – shot up to levels not seen since the last devaluation panic of 2020.
To make matters worse, the president is locked in a turf war with his powerful vice president.
Guzmán’s resignation, motivated, among other factors, by the divisions within the ruling party and by Cristina’s criticism of the government’s economic course, forced Alberto Fernández, once announced through social networks, to seclude himself for hours. without having contact with anyone and, as if the country had temporarily been left without a president, according to the newspaper The nation, Fernández released a phrase to his political acquaintances that left them frozen: “If they keep screwing me, I resign and they all go to hell. I’m not going to call her (Cristina), I’m not going to sign my surrender.”
In this way, the uncertain dynamics of the entire week that caused an adverse reaction in international markets would be sealed.
The nation revealed that one of the witnesses of those critical moments would later confess: “That day, some of us feared that he would actually leave. He was too reluctant to talk to Cristina”.
On the vice president’s side, everyone seemed to want to minimize the situation and force a dialogue, which would take place in extremis on Sunday night, even if it was only to agree on the landing of Silvina Batakis at the head of the economic portfolio and avoid a Monday no minister.
Cristina made it known that she enabled the arrival of the economist, but that she did not consider her her own. For the first time, the vice president appeared as the person in charge of economic management, a look that cuts her possibility of questioning measures, although from then on she accepted a truce, at least temporarily.
With the protests as a backdrop, a more moderate Alberto Fernández took advantage of the commemoration of independence to make a strong call, live and direct, in favor of the “unity” of the ruling coalition.
“There is no political future if that first link, which is unity and that includes us all, is not built and strengthened every day,” he said on Saturday from San Miguel de Tucumán.
In his first public speech after Guzmán’s resignation, the president redoubled his commitment to a “common horizon, dialogue and consensus” and defended his management, giving as an example the growth of 10.3% of GDP in 2021 or the creation of more of a million jobs registered last year, although he acknowledged that “problems” persist.
In this sense, Fernández once again ratified the program agreed upon with the IMF, underlining the need to “walk the path towards fiscal balance”, one of the terms of the agreement most questioned by the vice president.
But from the IMF they see another reality. Julie Kozack, deputy director of the Western Hemisphere, lamented Guzmán’s departure and acknowledged that they have little room to change Argentina’s course because they do not want to appear responsible for the crisis.
“As the Argentines say, they have us by the balls,” admitted the Englishman Ben Kelmelson, representative of the agency in the country, pointing out that the IMF only implores the Government to approach at least some of the committed goals, in order to justify before the enraged German and Japanese shareholders the continuity of the program with Argentina.
Meanwhile, leftist social organizations announced a new mobilization for this Friday in Buenos Aires.
INTERNATIONAL WRITING
With information from Efe, Bloomberg and The Nation
(GDA)
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