Argentina: under pressure, Macri multiplies actions in favor of purchasing power

Argentina: under pressure, Macri multiplies actions in favor of purchasing power


Buenos Aires (AFP)

Three days after his electoral defeat in primaries, Argentine President Mauricio Macri announced Wednesday a series of measures to "give a boost" to the purchasing power of the middle classes and popular and try to catch up before the presidential election of October 27th.

Minimum wage increases, one-off bonuses, tax cuts and freezing of gasoline prices for three months: these announcements come in the wake of Sunday primaries, which are considered a dress rehearsal before the presidential election.

The outgoing Liberal president, who is running for another term, was brutally defeated by moderate Peronist Alberto Fernandez and his former cross-town president Cristina Kirchner, who was charged with several corruption cases.

They won 47% of the primary vote, compared to 32% for the tandem composed of Mauricio Macri, 60, and Peronist leader Miguel Angel Pichetto.

If such a result were confirmed in the October elections, Mr. Fernandez, 60, would be declared winner in the first round: according to the electoral law, to be elected, one must obtain at least 45% of the votes or 40% and a 10-point lead on the second.

The measures announced Wednesday aim to "give a boost" to the purchasing power of Argentines, said the head of state during a televised speech before the opening of markets.

"What I asked you was very difficult, it was like climbing the Aconcagua," Macri said of the efforts made by the Argentineans since he came to power, evoking the highest summit of the continent (west of country, 6,962 m).

Overwhelmed by two currency crises in 2018 that caused its currency to lose 50% of its value, Argentina called on the International Monetary Fund (IMF) to rescue a loan of over $ 57 billion in return for budget austerity cure.

"You are tired and tired, arriving at the end of the month has become an impossible task, many families have had to cut back on their expenses," the president continued.

- "Recover voters" -

Among the measures is an increase in the minimum wage, the extent of which has not been specified. Currently, it is 12,500 pesos (190 euros).

In addition, an extraordinary bonus of 2,000 pesos (30 euros) will be paid to employees and another 5,000 pesos (76 euros) to civil servants and security forces.

An income tax reduction is also implemented for employees.

Finally, small and medium-sized businesses will be able to spread their tax debt over 10 years and the price of gasoline will be frozen for 90 days.

At a cost of 40 billion pesos (about 600 million euros), these announcements concern "17 million workers and their families and all small and medium enterprises," said the president.

Mauricio Macri hopes to close the gap before the vote, to calm social discontent in this country stuck in the recession and the markets, which fear a return of the left to power.

"These measures reflect the need to focus on the sectors that have been most affected by the economic crisis and have turned their back on the president in the primaries, and they also demonstrate the need to recover some of these voters," he said. Paula Garcia Tufro, an analyst at the Atlantic Council, a Washington think tank.

The specter of a default, as in 2001, has also resurfaced since Sunday, while the first repayments to the IMF are expected in 2021.

Wednesday morning at the opening, the Argentine peso lost 4.5%. It was trading at 61.08 pesos for one dollar. Monday, the day after the primaries, the stock market plunged nearly 38% and the currency had lost almost 20%.

© 2019 AFP

ref: france24