<b>By Martin Gambarotta</b>

Politicians, in case you hadn’t noticed, are currently doing a lot of talking. Politicians always talk a lot. But currently there is a more formal setting to the talks. This is what is locally referred to as “dialogue.” President Cristina Fernández de Kirchner, after the ruling party lost the midterm elections last month in Buenos Aires province, has called for “dialogue” with the opposition. The President and her husband Néstor Kirchner, who headed the list of congressional candidates in Buenos Aires province, thought that they could sort out Argentina’s chronic political woes with clout.

But Kirchner, after a year-long row with farmers over export duties, lost. Most politicians and many observers agree that the outcome of the election shows that what the public wants is not warring politicos at each others throats but “dialogue.” The public wants to believe in it, so the politicians are talking. Actions are supposed to speak louder then words. Yet right now the only political action seems to come from the words politicians utter.

How wise is this? “Dialogues” have fallen through a zillion times in Argentina in the past. But it doesn’t really matter. This, after all, is a land that spent all of Wednesday speculating whether it would snow in freezing Buenos Aires. Alas, you can’t talk the weather into snowing. You can’t have a white Buenos Aires through wishful thinking.

Yet through “political dialogue” the leaders of this nation are telling the public that they can fix Argentina. One way of looking at this is that the Kirchners are trying to talk their way out of a tight spot. Fernández de Kirchner has two and a half years left in office. But her popularity stands at 30 percent and there are whispers that an institutional crisis could happen some way down the road. What lies latent under the talks is another calamitous institutional crash.

The President met with City of Buenos Aires Mayor Mauricio Macri, the leader of the centre-right party PRO, on Tuesday in Government House. Macri’s party won the midterm election in Buenos Aires in June. Unión-PRO, headed by Francisco de Narváez and backed by Macri, defeated Kirchner in Buenos Aires province, the Peronist stronghold. Macri could have shown no mercy when he met the defeated President on Tuesday. Instead, he presented Fernández de Kirchner with a gift before getting down to the business of discussing metropolitan issues.

“The idea,” Macri told reporters, “is not to commit collective suicide to see who is right.” There you have it: Argentina is on the brink once again. Yet Macri, at least in public, is not in a suicidal mood. Fernández de Kirchner and Macri reached no agreement on Tuesday. Macri insisted that the national government must transfer the control of the metropolitan section of the Federal Police (and the money to run it) to the municipal government. The mayor also needs to work together with the national government to move on a halted plan to extend subway lines. “We’re going to meet again in 30 days,” said Macri.

Did he say 30 days? That’s a very long time in the current situation of institutional frailty. But Macri is granting the Fernández de Kirchner administration time. The President, speaking at a ceremony on Wednesday, said the meeting with Macri was “good.” But she underlined that transport in Buenos Aires is heavily subsidized by the national government. The national government is also insisting that the transfer of the Federal Police must be approved by Congress. Macri, who argues that the President can decree the transfer, has already established a new Metropolitan Police which is about to go on the beat.

The President has also met with the governors of Chaco (Peronist Jorge Capitanich), Santa Fe (Socialist Hermes Binner) and Juan Manuel Urtubey (Peronist Salta). Fernández de Kirchner needs the backing of the governors, especially the Peronist ones, if she is to stand a chance of running the nation until 2011.

Yet, with most provinces in debt and struggling to pay public administration salaries, the “dialogue” with the governors is rapidly turning into an argument about federal revenue sharing. Aníbal Fernández, the Cabinet chief, stated on Friday that the point of the meetings with the governors was not discussing debt and revenue sharing. The governors, the Cabinet chief said, had not raised the issue in the meetings with the President.

Ruling party and opposition are currently trying to come across as reasonable. Florencio Randazzo, the interior minister, met with De Narváez in Government House on Wednesday to discuss plans to reform the political system. The talks were also attended by deputies-elect Felipe Solá (a dissident Peronist once on Kirchner’s side who ran on De Narváez’s ticket) and Gabriela Michetti (the PRO candidate who won in the City of Buenos Aires).

Political reform, De Narváez said, is not a priority. The President on July 9 summoned all political parties to discuss a plan to introduce open, compulsory and simultaneous primaries. Most parties agree that a reform is needed. But issues like poverty and the farm policies are more important right now, De Narváez said.

Randazzo said that he promised to take Unión-PRO’s words to the President. Randazzo said the same thing a week ago on meeting with the leaders of the Social and Accord, an alliance which includes the Radical Party, the Socialist Party, the Civic Coalition and ConFe (the party of Vice-President Julio Cobos).

“Dialogue” is also proving a testing ordeal for the opposition. Elisa Carrió, a leader of the Civic Coalition, was the only leader of the Accord who refused to attend or send an emissary to the consensus talks last week. The Civic Coalition includes Carrió’s party (ARI) and a party (GEN) headed by Deputy-elect Margarita Stolbizer. Stolbizer, to the disgust of Carrió’s supporters, attended the Government House meeting.

Stolbizer’s decision has prompted a rift in the Civic Coalition caucus in the Buenos Aires province legislature. Accord leaders scrambled to stop a similar — and far more damaging — rift in the Lower House of Congress. Kirchner quit the chairmanship of the Peronist party on June 29. Carrió, who came third in the City of Buenos Aires, is currently also out of the picture, officially “on holiday with her children.”

The irony is that consensus seems to be far more damaging to the opposition than Kirchner’s confrontational style ever was. Kirchner’s war with the farmers is what united the splintered opposition in the first place last year. But will they hold together now that the President is chirping the tune of consensus? Cobos and Carrió, who both fancy themselves as presidential candidates of a Radical-led coalition in 2011, seem to be at odds in the Accord.

Could a similar thing happen between Macri and De Narváez in Unión-PRO? Right now it doesn’t look like it. De Narváez, because he was born in Colombia, according to the Constitution cannot run for president, which makes it easier for Macri to get along with him.

Yet De Narváez, unlike Macri, is currently not in office and could gain from political instability. Randazzo’s meeting with Unión-PRO on Wednesday did not go wrong. But Solá said that his party did not intend to “co-govern” Argentina. “Governability”, Solá said, “is something that the President must earn for herself.”

Now it may sound astonishing to you but a dreary long word like “governability” can instill fear and dread here. During the campaign Kirchner had said that defeat for the ruling party would put “governability” at risk and lead to a major crisis like in 2001. Kirchner, now that the ruling party has lost control of the Lower House of Congress, probably wishes that he never had said that. But he did. And even if he had never said it it’s pretty clear that the President needs to work hard to stay in control. Listen to what Solá had to say. The President, Solá said, should strive to regain credibility if she wants to secure “governability.”
Solá called for the reform of INDEC, the state-run statistics bureau that private economists and the opposition say underreports inflation.

The national government, which overhauled the INDEC in 2007 and placed it under the wing of Domestic Trade Secretary Guillermo Moreno, argues that all it did was to change the way in which the consumer price index is measured. But INDEC, once a respectable brand name, has turned into a public relations disaster. Moreno, a nationalist economist who also aggressively monitors consumer prices, is the ultimate bad guy for much of the press and the opposition. Yet despite the enormous pressure Fernández de Kirchner has refused to sack Moreno. A group of Peronist governors, including Capitanich, reportedly tried to talk the President into agreeing to have Moreno resign. Yet no such thing has happened.

Amado Boudou, the newly-appointed economy minister, announced on Tuesday what the government billed as a drastic reform of INDEC. Boudou said INDEC will work under the wing of the Economy Ministry. He said an academic board would review the bureau’s consumer price index policy dating back to 1999.

The board will work on a report that once finished will be sent to Congress, Boudou said. Another board consisting of banks, trade, business, labour and consumer groups will also monitor INDEC’s performance, he added. But the opposition cringed when Boudou announced that Norberto Itzcovich, a Moreno stalwart, had been promoted to technical director of INDEC. Boudou, taking questions at an Economy Ministry press conference, said that Itzcovich had worked at INDEC for 17 years and should at least be given a chance to show his worth.

The problem, for the purposes of INDEC’s reform, is that Itzcovich defiantly declared in a recent interview that “Moreno is here to stay” and also swore blind allegiance to Kirchner.

The opposition almost instantly complained that the cosmetic reforms were not enough. Mario Blejer, an economist who is purportedly advising Boudou, said that more drastic changes were necessary. The President, when she named Boudou on July 8, said she expected the new minister to do a lot of talking. Outgoing minister Carlos Fernández, the President said on praising his technical brilliance, had been criticized for his low-profile and never having much to say.

But doing a lot of talking could inflict more damage than no talk at all if what you say carries no authority and is dismissed as laughable by the press and opposition. Yet there still could be some long-term substance to the reform. Boudou announced a plan to swap inflation-linked debt bonds, which were one big expensive reason why the Kirchners ruthlessly changed the way inflation was measured in 2007.
Ultimately Boudou could face disaster early on if the ambitious swap to rid Argentina of any cumbersome inflation-linked debt he is planning falls through.

Boudou has yet to name his full team and during the press conference he said that he would not be “hurried by the press” into making decisions. Boudou also lunched with leaders of the Argentine Industrial Union (UIA) on Tuesday.

The government is about to call a meeting of the Economic and Social Council to hammer out consensus economic policies with business and trade union leaders. But the leaders of last year’s farm rebellion over export duties, grouped in a liaison board, have yet to be formally invited to attend the talks.

Executives of the Association of Argentine Business leaders (AEA) met with the Liaison board leaders on Tuesday. AEA has also issued a 12-point statement calling for “clear ground rules” to favour private enterprise. The farmers, who have also met with the leaders of all major opposition parties, thus seem to be sponsoring their own round of talks separate from the government.

If the government-sponsored talks fail there will be a huge vacuum that could lead to an institutional crisis. The government has yet to formally establish the Economic and Social Council. But already the leaders of the General Labour Confederation (CGT), headed by the pro-government truck driver Hugo Moyano, are brawling. Moyano called a rally on April 30 to express support for the ruling party candidates in the election. Critics accuse Moyano, who controls the strategically important transport unions, of naming the Health Ministry officials who manage the union healthcare funds in exchange for his support.

Kirchner quit as party leader when he lost. Moyano, who is also the vice-president of the Peronist party now headed by Buenos Aires Governor Daniel Scioli, had so far managed to survive unscathed. But on Monday a handful of powerful unions known as the “fat cats” said that Moyano must end his “one-man” style of leadership. The “fat cats,” who include power utility union leader Oscar Lescano and retail store employees’ union leader Armando Cavalieri, accused Moyano of only seeking to benefit the truck drivers.

Moyano’s union, now headed by his son, announced recently a 17 percent wage increase agreement with the management. The deal came after the national government released 470 million pesos in subsidies to the truck companies.

Other unions are finding it more difficult to score wage hikes. The UOM metal workers union went on strike on Thursday to demand a 22-percent hike which is being refused by the metal industry chamber. The UOM, which claims the increase is needed to protect the “purchasing power” of salaries against inflation, has called a new strike for this week. The UOM conflict could also hamper the consensus talks if an agreement is not reached soon.

Moyano, who has muscled his way to the top of the CGT after leading a rebel faction that opposed market reforms in the 90s, did not take the criticism kindly. He accused the “fat cats” of selling out workers in the 90s when Argentina was ruled by Carlos Menem, a Peronist who turned neoconservative once in office. But Moyano had something to worry about. This time the “fat cats” were in league with the “independents,” a group of unions that are part of Moyano’s CGT leadership but do not report to him directly. The “independents” include the UOCRA construction workers’ union and the UPCN civil servants.

The “fat cats,” especially Lescano on Wednesday, took offense at Moyano’s attack. The CGT, Lescano declared, is already broken. A CGT rift at this time would almost certainly ruin the Economic and Social Council even before it gets off the ground. The “independents” and the “fat cats” together have enough clout to, say, establish a breakaway CGT that could negotiate deals with AEA, UIA and the farmers. Moyano did not take back his words on Wednesday, but he refrained from throwing any more punches.

The next day, speaking at a CGT rally, Moyano apologized. Almost instantly Rodríguez, the leader of UPCN, declared that “the CGT is not divided.” But Rodríguez once again urged Moyano to share his power with the rest of the CGT leadership. Cavalieri, who was flanking Rodríguez at the press conference, said that “Moyano must understand that he is not only the leader of the truck drivers.” The “fat cats” and the “independents” could launch an assault against Moyano once again if the Economic and Social Council talks fail. Yet, even if he is shown the door as CGT leader, Moyano would continue to control the strategically important transport unions. Moyano on Friday denied speculation that the President in person had urged him to mend fences with the “fat cats.”

Scioli meanwhile on Friday visited the Rural Society farm fair, prompting speculation that he has Kirchner’s go ahead to seek an agreement on policies with the farmers. Scioli and Senator José Pampuro, the provisional head of the Senate, met with SRA head Hugo Biolcati and Mario Llambías (the head of the Argentine Rural Confederations).

The Peronist party in Buenos Aires province, controlled by the mayors of Greater Buenos Aires, has closed ranks behind Scioli, who was second on the Peronist list that lost to De Narváez on June 28. Scioli’s visit to the fair came only days after he met with farmers from Buenos Aires province to offer them financial aid. “Now Scioli is on our side,” quipped one Rural Society leader from Buenos Aires province. But Scioli reportedly has Kirchner’s approval to negotiate with the farmers.