The truce and nothing but the truce

CFK and BA province Governor Daniel Scioli show they are still strategic allies, but for how long?

What is it you say to a couple of bickering brats? Stop arguing you two, that’s what you say. But what can be said when those doing the arguing are Argentina’s political heavyweights? When it’s not President Cristina Fernández de Kirchner and Buenos Aires City Mayor Mauricio Macri (the leader of the centre-right party PRO) arguing about who should run (and pay for) the metropolitan subway system it’s the President engaging in a cold war with Buenos Aires province Governor Daniel Scioli about money. Here’s the thing: you can’t order very powerful people to stop arguing. It is they — the President, the mayors and governors of this land — that get to do the ordering. So what can you expect from the rest of the nation if Argentina’s politicos can’t get along? There’s every reason for them to stop arguing now. Well, actually, there’s at least one important reason: the national government on Friday reported that the economy in May had contacted 0.5 percent year-on-year. That’s the first official drop since 2009. The year 2009 was not a great one for the Kirchnerite administration. It was a year dominated by swine flu and an economic slowdown. Néstor Kirchner (the President’s late husband and predecessor) lost the midterm elections in Buenos Aires province in 2009.

Now even the state-run INDEC statistics bureau, accused of manipulating the inflation rate, is saying that the economy is slowing down once again.

Economic woes are not good news anywhere. But in Argentina economic woes many times also come with a major political crisis attached. The novelty in 2009 was that the CFK administration survived a pretty bad economic year. Fernández de Kirchner was re-elected in 2011. There was no major political crisis after that bad economic year that was 2009.

Will Fernández de Kirchner also survive this year’s slowdown? 2012 will not be remembered as a great year for the global economy. Spain, in case you hadn’t noticed or are in denial, is really hurting. Now Argentina is slowing down too (the good news is that its economic problems can hardly be compared with Spain’s). But just because the Kirchners somehow managed to weather an economic storm in 2009 (after the fierce standoff over export duties with the farmers in 2008) doesn’t mean that the same feat can be accomplished time and time again.

The President and Scioli are effectively playing with fire by engaging in a power struggle for the control of the Peronist party. Technically, Scioli is not looking for an argument (see Page 4).

Yet Scioli has already announced that he will take a shot at clinching the Peronist party’s presidential nomination in 2015 if the Constitution is not reformed to allow the President to seek a third consecutive term in office.

Until recently, Fernández de Kirchner and Macri were cancelling each other out by arguing most of the day while Scioli looked on. (Scioli and Macri reportedly have a “pact of no aggression.”) But Fernández de Kirchner had recently directed her wrath at Scioli complaining, without naming him, of his “mismanagement” of the province. The President was so exasperated that she initially refused to send Scioli the 2.8 billion pesos required to pay half a million provincial civil servants their midyear bonus. Instead, national Economy Minister Hernán Lorenzino had announced that the CFK administration was sending the provincial government one billion pesos. Scioli was forced to announce a plan to pay the midyear bonus in four installments, prompting a wave of strikes by state workers (including teachers).

Fernández de Kirchner and Scioli belong to the same ruling Victory Front, a coalition that includes the Peronist party. Why would the President want to inflict damage on Scioli? Greater Buenos Aires, now a Kirchnerite bastion, can get incredibly volatile when economic hard times hit.

Fernández de Kirchner and Scioli are now very close to being openly political rivals. But wait. Somebody in the President’s inner circle decided on Thursday to hit the pause button in the cold war with Scioli. The governor on Thursday huddled with the President in Government House. Then Fernández de Kirchner and Scioli appeared together at a ceremony in Government House. Lorenzino, before the President’s meeting with Scioli, announced on Thursday that Buenos Aires province would be granted a loan of 600 million pesos from the ANSeS social security agency and was also allowed to issue a bond worth 900 million pesos. The conflict about the midyear bonus was effectively over. The bonus will be paid next week — not entirely on time but only a trifle late after all the kerfuffle.

Fernández de Kirchner and Scioli are clearly still on speaking terms despite the governor’s presidential ambitions. It helps that this is not an election year and that all the President’s potential rivals can do, for now, is talk.

Talking is what Córdoba Governor José Manuel de la Sota, Scioli’s strategic ally in the nascent Peronist jockeying, did. In Argentina, De la Sota said commenting on the recent approval of gender laws, it’s easier to get hold of an identity document after changing sex than it is to purchase dollars at the official rate.

Buying dollars to keep as savings is now illegal. De la Sota’s stinging comment came before Thursday’s apparent truce called by Fernández de Kirchner and Scioli. There are reasons to think that the truce at some point will lead to more bickering.

Scioli is the chairman of the Peronist party, a position he inherited when Kirchner died suddenly of a heart attack in 2010. There could be a moment of truth in March, 2013 (an election year) when the Peronist party is scheduled to hold a vote to elect a new leader. Will Fernández de Kirchner choose to force Scioli out of the Peronist party leadership as soon as next year? The Kirchnerite and pro-Scioli factions of the Peronist party could also face each other in primaries to elect candidates ahead of next year’s midterm elections. But polls show that Scioli, with his bullet-proof moderation, is the most popular politician in the land.

Arguably the Peronist party has been in the middle of one big power struggle ever since Juan Perón died in 1974 while president. That perpetual power struggle also includes the General Labour Confederation (CGT), which considers itself the trade union wing of the Peronist party. The national government has now declared teamster Hugo Moyano, who was re-elected leader of the CGT on July 12, “in the opposition.” Fernández de Kirchner and Moyano have been at odds after she refused last year to meet the political demands voiced by the CGT ahead of the presidential elections. Moyano, much like Scioli is doing now, showed his political ambition cards, and the President was not amused.

Moyano’s re-election as CGT leader has been declared illegal by the Labour Ministry, which claimed that quorum was not reached at the meeting that called the July 12 convention. The convention was not attended by a group of pro-government unions, which include the large industrial sector unions, the UOCRA construction workers and the UPCN civil servants union. The pro-government unions are expected to call a convention to elect a new leader of the CGT in October.

Moyano formally took office as the boss of his CGT faction on Monday. On that very same Monday, the President called a meeting with the pro-government trade unions in Government House. The pro-government unions are expected to elect Antonio Caló, the leader of the UOM metal workers union, as the CGT’s new secretary-general. But Caló raised eyebrows by not attending Monday’s meeting hosted by the President. The pro-government unions seems to have the majority in the CGT. But Moyano, who controls the powerful teamsters, has managed to constantly outmonoeuvre them.

The President on Monday called a meeting of the Minimum Wage Council. But it’s possible Moyano and the unions that support him will demand to attend the wage talks because they belong to the council.

Moyano continues to throw jabs at his rivals, which include the so-called “fat cat” union bosses who backed the market-friendly labour reforms introduced by then president Carlos Menem in the nineties.

The rift in the CGT will be a factor in the Peronist party power struggle if both Scioli and De la Sota decide to openly defy the President’s authority ahead of the midterm elections. The President could have no option but to make a bid to lead the Peronist party herself in March and dare the governors to face her candidates in a primary.

The economic slowdown will also be a factor. How will the President react to further economic difficulties? Interior Minister Florencio Randazzo on Thursday announced an increase in public transport fares for commuters without the state-issued SUBE electronic top-up cards. Randazzo also said that the national government will cap public transport subsidies and that districts (including Buenos Aires City) will in the future have to decide whether to pay more subsidies or increase fares. The reform effectively leaves Scioli, Macri and others with the political responsibility of ordering unpopular public transport fare hikes in the future.