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ECONOMY | 10-05-2018 09:04

Congress moves closer to freezing utility price hikes

Onlookers generally agree that the IMF will demand strong austerity measures from the government if Argentina hopes to secure financing.

The tension surrounding Argentina’s shaky economic situation was heightened last night as the country’s Lower House passed a bill to freeze increases to utility prices.

The Mauricio Macri government has been rolling back the multi-billion-dollar energy and transport subsidies that it inherited from the Cristina Fernández de Kirchner administration.

The opposition’s bill passed the Lower House yesterday with 133 votes in favour, 94 against and three abstentions. If it passes the Senate, the bill will roll back electricity and natural gas prices to November 2017 levels and prohibit future increases that exceed wage growth. It will also cap increases for small businesses and cooperatives to the inflation rate of wholesale goods.

The government has promised to veto the bill if it passes the Senate, where the ruling coalition has greater strength.

Argentina announced talks with the International Monetary Fund on Tuesday, 17 years after the country defaulted on its debt and 12 years after cutting ties with the fund. Onlookers believe the Fund will demand strong austerity measures from the government if it is to secure a loan.

Unions, social and political groups gathered outside Congress on Wednesday evening to protest the government's decision to sign with the IMF.

“Today we see the ghost of (Domingo) Cavallo in the form of his best disciples”, said Teamsters’ Union boss Pablo Mayano whose union gathered outside Congress “to support those lawmakers who have come to defend the interests of the Argentine people”.

-TIMES

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