President Mauricio Macri held a press conference yesterday, in which he was questioned about the main issues dominating the current political conversation, such as those stemming from the economic turbulence the country started experiencing in May and led to the agreement with the IMF – the inflation rate, economic growth (or lack thereof), and taxes on soy exports among others; the abortion debate; and the controversy over the alleged false contributors to the Cambiemos 2017 midterms campaign.
Some pundits highlighted that while holding this kind of event and taking questions from media outlets openly critical of him – such as El Destape and Tiempo Argentino – is laudable, the President avoided answering most of the questions, which defeats the conference’s purpose.
However, you can be the judge. Here are his main statements and some background to further understand the issue at hand.
“I want to tell you we are facing a storm, but we have been able to lower the sails [many outlets highlighted that he began saying flag, but corrected himself mid-word] and strengthen by staying on course,” began Macri.
The President went on to indicate that a main reason why the country is going through this situation answers to external factors “that we have no control over,” but assured that “I still believe in the future we have ahead of ourselves and am convinced we are making the right effort.” “The country’s growth will be reduced. We will go through months during which the decisions we have made will mature. But we will go back to growing next year,” Macri added.
Last Friday, the IMF published a report in which it analyzing what the rest of the year could hold for Argentina’s economy. In a positive scenario, the report said, the economy will grow by 0.4 percent. However a negative one could mean a 1.4 percent reduction of the country’s GDP. Considering that before economic turbulence the country’s economy grew by 3.6 percent in the first quarter of the year, this means Argentina’s GDP will unfailingly drop in the next three quarters. The question is how much.
Questioned about the government’s plan to deal with the country’s high inflation, Macri’s answer was an underlying admission of his administration’s not having been able to efficiently tackle the issue, saying he hoped to “put an end to something we have been dragging for 70 years.”
“We are working to put a limit to inflation, which is something that prevents us from receiving more investment,” said Macri, who then assured that “next year’s inflation will be 10 percentage points lower than this one, and will be close to a single digit by 2020.”
This statement is quite far from the government’s initial predictions, as its officials had initially promised that inflation in 2018 would clock in at 10 percent. In a press conference held on December 27, 2017, the economic cabinet announced a modification of this target to 15 percent. But reality turned out to be something else entirely, considering that at this pace, the rate at the end of the year will be close to 30 percent.
June’s inflation rate was of 3.7 percent, the highest in the last 25 months, and the accumulated rate for the first semester of the year is of 16 percent.
- Read more: Indec: June Inflation Clocks In At 3.7%
Layoffs at Télam
One of the journalists present at the conference used his time to remark that his colleagues from the state-run news agency Télam were not present in the room, but outside, protesting against the dismissal of more than 350 employees by the administration.
About this, Macri began by calling the situation “unfortunate” – “I am the first one to lament the loss of a job” – but argued that the layoffs were part of a broader plan aimed at reducing the fiscal deficit and modernizing the state to “put it at the service of the Argentine people.” In Télam’s case, he said, its authorities concluded there was an “overpopulation that grew in the last four years of the previous government and particularly in the past months.”
Despite the government’s decision, Télam workers keep fighting for their jobs and on July 13th won their first battle: a Labor Judge upheld an injunction presented by five of the workers to be reinstated. Judge Ricardo Tatarsky argued that, given the high amount of layoffs, company authorities did not follow the regular protocol determined these for events, called “mecanismo preventivo de crisis,” even though they should have. In the case of a company the size of Télam, the Labor Ministry indicates that it has to be activated if the layoffs affect more than 10 percent of the workers – in this case, it affected almost 40 percent of them.
As mentioned, the ruling affects five workers, but it is highly likely the others will use it as a favorable precedent to present injunctions of their own. Télam authorities have not yet complied with the judge’s decision.
Federal System of Public Media, Hernán Lombardi, assured the workers were laid off because, during the Kirchner administration, the staff grew in a disproportionate manner and with one single goal: “To turn the agency into a propaganda machine, confusing journalistic labor with political campaigns, and tarnish the agency with corruption allegations.”
The Possibility of Suspending the Reduction of Taxes on Soybean Exports
That same journalist then highlighted that the mentioned IMF report indicates the government brought up the possibility to suspend the reduction of taxes on soybean exports, and asked if the administration was going to follow through or if they were making the IMF a promise they were not planning on keeping.
Macri did not answer whether the government had made that promise, but rejected implementing the measure. “I don’t think it is a smart tax. In fact, I believe it destroys the future.,” said the President.
The farming sector was quick to react to the rumors when they ensued, requesting an “urgent” meeting with Macri and saying they would “do what they had to” if the decision were to be implemented. However, Macri assured the government will stick to one of its main campaign promises.
- Read more: Farming Sector on its Toes as Rumors Ensue about Government Suspending Reduction of Taxes on Exports
Fake Contributors to the 2017 Midterms Campaign
As expected, the President was questioned about the journalistic investigation conducted by El Destape‘s Juan Amorín, which alleges that the Cambiemos coalition laundered money for the 2017 midterms campaign in the Buenos Aires Province through the recipients of social welfare plans.
Macri, however, made reference to the answer given by Buenos Aires Province Governor María Eugenia Vidal earlier that day.
Vidal announced she’d ordered an audit on the campaign contributions, and fired the administration’s Accountant General María Fernanda Inza, as she was Cambiemos’ treasurer during the campaign and therefore in charge of declaring the origins of said contributions. Inza had been appointed to her now former post only five days before her firing, and officially took office one day before being let go.
Aligned with Vidal, Macri went on to highlight the need for contributions to be made through the banking system. In fact, Interior Minister Rogelio Frigerio announced today the government will send a bill to Congress aimed at doing exactly once its winter recess ends.
At the end of the conference, Macri was questioned about the controversial statements made by the co-founder of the Cambiemos coalition Elisa “Lilita” Carrió regarding his role in the abortion debate. A staunch detractor of the bill, Carrió said in a TV interview earlier this month that Macri had enabled the debate because he had been told the law was not going to be passed.
- Read more: Carrió Goes on TV, Drags Macri into Abortion Debate, Competes with Michetti for Most Outrageous Statement
Rather than addressing Carrió’s statements, Macri said he enabled the debate because he thinks that “Argentina has to do it [debate], it is a path toward growth, to know how to exercise our freedoms with responsibility.”
“I think what’s important is valuing what we are achieving. A taboo subject, like abortion, that could not be discussed, is being debated like it should,” the President finished.
The abortion debate has driven a wedge within most political parties, but none experienced an internal turbulence that be compared to that of Cambiemos. Perhaps what illustrates this the most are the two pictures that officials supporting each one of the two camps took before the voting in the Lower House on June 14th.
The final vote at the Senate will take place on August 8th.