Monday, March 4, 2024

ARGENTINA | 08-08-2020 09:31

What we learned this week: August 1 to August 8

Stories that caught our eye over the last seven days in Argentina


At press time yesterday there was a total of 235,677 confirmed cases of coronavirus and 4,411 deaths, as compared to 191,302 cases and 3,543 deaths the previous Friday. At the start of the week the national government and City Hall moved in opposite directions on the quarantine front, with the latter prohibiting social meetings nationwide (defied by the province of Corrientes) while the latter freed shopping along several main avenues. The week saw the Covid-19 toll reach various milestones – during the weekend it overtook France for confirmed cases and Germany on Tuesday while the number of deaths hit the 4,000 mark on Wednesday. Numbers of confirmed cases continued to rise, with each day worse than the last. In midweek a UNICEF report quantified some collateral social damage from lockdown when it estimated that the percentage of children below the poverty line would grow from 50 to 60 while their numbers would rise from seven to 8.3 million.  



In the small hours of Tuesday the government and the three main bondholder groups hammered out an agreement to stave off default after a negotiating period almost as long as quarantine even if the deal will not be signed, sealed and delivered until formally presented to the Securities & Exchange Commission in the United States on August 24. The deal was clinched with a net present value of 54.8 cents per dollar, a far cry from the 39 cents beyond which there was no sustainability, according to Economy Minister Martín Guzmán back in March. Apart from splitting a difference which had shrunk to three cents per dollar, a key to the breakthrough was the government deciding against any new extension but proceeding straight to negotiations with the International Monetary Fund if deadlock persisted. The agreement, which will provide relief estimated at US$42.5 billion on public debt under foreign jurisdiction over the next five years and US$37.7 billion in the next decade, was widely hailed by not only the main business chambers but also most of the opposition. Markets smiled on the breakthrough with the “blue” parallel exchange rate down from 136 to 128 pesos in the immediate wake of the agreement although closing the week at 133 while the official exchange rate allowed itself the luxury of revaluing the national currency with the Banco Nación rate down to 76.75 pesos from 75.75 the previous Friday. Country risk closed the week at 2,056 points, sharply down from the 2,276 points at the end of July amid optimism that it could fall as low as 1,500 points in the course of this month.   



President Alberto Fernández rapidly followed up the clearer financial horizons from last Tuesday’s debt settlement by relaunching the Procrear housing plan in the hope of restarting the economy by offering homes to the middle class and jobs for the working class (also to be boosted by the Obras + Trabajo programme presented on Wednesday funding community work nationwide for over 40,000 shantytown residents at an initial cost of two billion pesos). Within two days over five million had already consulted about the soft credit lines offered under the Procrear scheme and 50,000 had filled in forms, the Housing Ministry reported yesterday. On Thursday President Fernández announced public works to the tune of 435 billion pesos as another of the promised 60 measures, which are due to follow in a steady stream over the next few days. The public works will be nationwide across the six regions of the country although Fernández only named five provinces in his announcements.



On Thursday the Central Bank confirmed renewal of its currency swap with China for the next three years to the tune of US$18.5 billion. These swaps date back to 2009 (when China extended 70 billion yuan, as against 130 billion yuan now), since being renewed and expanded in 2014, 2017 and 2018. In midweek Central Bank reserves stood at US$43.375 billion, which means that around three of every seven of these dollars are courtesy of Beijing.



Hugo Moyano’s teamsters defied a general freeze of collective wage bargaining during quarantine to clinch a 30 percent wage increase on Tuesday for a starting salary of 45,000 pesos and average earnings of over 100,000 for the union’s almost 200,000 members.



The Criminal Appeals Court on Wednesday ruled the government’s judicial reform proposals while on Thursday the Federal Civil and Commercial Appeals Court rejected them, without comment on their constitutional status.



Vice-President Cristina Fernández de Kirchner has sued the Internet giant Google over a May 17 entry giving the job description below her name as "Ladrona de la Nación Argentina." Evidently some unknown person had not only searched but also hacked the information. In her lawsuit the ex-president asked how long this entry “smearing her name, image and honour” had been up and how many people had seen it, given that Google claims some three billion visits daily, before defining the sum of damages which would be sought, adding that she would donate these to the "Sor María Ludovica" children’s hospital in her native city of La Plata. At the start of the week the vice-president shunned the resumption of the public works corruption trial where she is the leading defendant.



Lomas de Zamora federal judge Juan Pablo Augé on Wednesday committed the AFI intelligence helm under the 2015-19 Mauricio Macri presidency to trial on charges of illegal espionage against Vice-President Cristina Fernández de Kirchner and several of her followers, abuse of authority and falsification of public documents. Apart from the indictment, Gustavo Arribas and Silvia Majdalani are forbidden to leave the country with their passports retained and a lien of two million pesos each slapped on their assets.



Facundo Astudillo Castro, 22, has now been missing in southern Buenos Aires Province for 100 days as from today with few indications as to his fate in the past week – an amulet given to him by his grandmother turned up in the nearby Vilarino police precinct on Monday but the discovery of a knapsack, bones and clothing reportedly linked to him by the roadside on Wednesday following a clairvoyant’s tip seems to have been a false alarm. The missing youth’s mother Cristina Castro said: "I have no hope of his being found alive.” 



After over four months of the nationwide coronavirus pandemic, a new respiratory problem surfaced in Rosario last week – over 300 people needed medical treatment for lung afflictions caused by the air pollution from fires on Paraná River islets. So far this year the fires, believed to be intentional, have already swept around half a million hectares of land mostly devoted to cattle-ranching. Security Minister Sabina Frederic promised the province of Santa Fe “support” without specifying any preventive action. Around 10,000 people demonstrated against the fires in Rosario last weekend.



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