October 31, 2014
CFK grants credits to stimulate economy
Days after the United Nations Economic Commission for Latin America and the Caribbean (ECLAC) reduced its growth estimates for Argentina, President Cristina Fernández de Kirchner announced last night a number of countercyclical measures to re-activate the economy, including grants for transport companies and subsidies for firms to prevent layoffs.
The president also announced her intention to revive the CEDIN dollar-denominated certificates of deposit created last year by allowing banks to receive commissions for the transactions where CEDIN holders use it to purchase property as an alternative method to paying with US dollars.
“We’re stimulating the Argentine economy through domestic consumption in a world that’s falling to pieces,” Fernández de Kirchner said during a rally at Government House transmitted via national broadcast, where she called business leaders “to keep investing in the country.”
She was joined by the head of the Central Bank Juan Carlos Fábrega, Economy Minister Axel Kicillof, Industry Minister Débora Giorgi and Labour Minister Carlos Tomada.
From buses to youth jobs
First, the president announced a programme to replace some 3,300 short-distance buses throughout the country through credits offered by the state-run Nación Bank.
Financing will cover up to 70 percent of the cost of buses and companies will pay a reduced annual rate, CFK explained.
“The measure will end up benefiting 16 million Argentines,” she said — 10 million in the Buenos Aires metropolitan area and six million more throughout the country.
The second announcement was related to the Progresar programme, aimed at helping youths between 18 and 24 years old finish their studies.
Last night, the head of state also said her administration will subsidize a percentage of the wages companies pay for young workers as part of a retooled Repro programme. Concretely, the government will pay 2,000 pesos monthly for each new apprentice taken on at factories for a period of during 12 months, CFK said. Should the apprentice be taken on full-time, the monthly expenditure would increase 2,700 pesos.
Finally, the head of state addressed the problem of the ill-fated CEDIN certificates implemented a year ago but that have failed to convince many sectors of the population of their legitimacy.
“The problem, according to the real estate chambers, was that banks were not collaborating with its implementation because they got nothing from the business,” Fernández de Kirchner explained. Therefore, she announced that the Central Bank has allowed banks to keep up to 1.5 percent of the CEDIN transaction in pesos.
Echoing earlier statements, the president criticized Argentines who have accumulated savings in dollars.
“Those who believe that they will save themselves (from the crisis) by buying dollars or keeping their money are likely to end up losing money” — a claim that could easily be dismissed, as the dollar has skyrocketed from 5.5 to 8.2 pesos during the last 12 months.
CFK also had time to goad New York Judge Thomas Griesa, calling him “a district judge who is overriding the sovereignty of a nation.”
“The decisions being made by this district judge don’t make any sense at this point,” she concluded.