Argentina is currently gripped by three harrowing issues that you can't just shrug off in a couple of days like a cold: the fight against the coronavirus, the government's bid to nationalise the debt-saddled soy crusher Vicentin and the renegotiation of more than US$65 billion worth of foreign debt.
Since taking office late last year President Alberto Fernández has granted an extraordinary number of interviews to news outlets and celebrity shows. The centre-left Peronist leader cut his teeth as a backroom Peronist party operative, most notably as Cabinet chief during the first Kirchnerite administrations from 2003 to 2008 – cultivating contacts in the press has always been part of his work. The head of state was interviewed live by a news show on Wednesday night from the Olivos presidential residence, creating a few moments of prime-time coverage that seized the news agenda.
It's not clear if the president is deliberately swamping the media with interviews or if he is simply hooked on speaking to the press without a clear communications strategy in mind. But when a president speaks there is no choice but to listen up.
Fernández voiced concern about the growing number of coronavirus cases, said Argentina had already technically defaulted before he took office, and insisted that so far he has seen no reasonable alternatives to the proposed outright nationalisation of Vicentin, a move he says will rescue the company, based in the north of Santa Fe Province, which is at least US$1.2 billion in debt with many local and foreign banks (including US$300 million dollars in debt with state-run Banco Nación).
On Wednesday night the president made his stances clear. The deadline to negotiate with the bondholders has been extended, he said. Fernández is playing hardball with the funds, saying that Argentina had already defaulted when he took over from centre-right president Mauricio Macri in December. The president said that in 2005 the first Kirchnerite administration took a year to renegotiate the debt Argentina had defaulted on after the 2001 crisis. Effectively, he’s saying that those initial debt negotiating deadlines earlier this year that stirred so much drama ended up meaning nothing. The negotiations are now being dragged out by Fernández – despite progress and reports that the talks are edging closer no deal has been reached with the bondholders.
Fernández touches on all issues during these long interviews. According to the president a bill is being readied to nationalise Vicentin, but it has yet to be sent to Congress because he wants to listen to potential “alternatives” from allies. The Vicentin issue has prompted angry demonstrations in the company’s twin hometowns in northern Santa Fe province. The president was scheduled to visit the region to mark Flag Day in the city of Rosario over the weekend, but he cancelled the trip after his doctor said he should stay at Olivos as the number of coronavirus cases peaks. The nationalisation – which is backed by the Kirchnerite wing of the ruling coalition – is not favoured by Santa Fe Governor Omar Perotti, a centrist Peronist. Former economy minister Roberto Lavagna, who served alongside Fernández in the first Kirchnerite administration before quitting in 2005, has also criticised the takeover decree and the nationalisation bill. The ruling Frente de Todos coalition controls the Senate but it does not control the Chamber of Deputies. Lavagna technically controls 11 lawmakers in the 257-seat lower house.
Fernández said he supports the nationalisation bill but admits that the bill has not been sent amid the search for “alternatives". A wealth tax bill recently trumpeted by Kirchnerite lawmakers, and backed by the president and Economy Minister Martin Guzmán (in charge of debt negotiations), has also stalled – it’s yet to be debated in the lower house, where the ruling coalition caucus is controlled by the Kirchnerites.
The approval of the Vicentin bill is a major challenge for the ruling coalition. The centre-right Juntos por el Cambio opposition caucus has already said that it does back the idea of debating the Vicentin bill in semi-remote sessions, which have been taking place by consensus during the pandemic. It’s also not clear if Lower House Speaker Sergio Massa, the once-Kirchnerite foe turned key member of the Frente de Todos, fully supports nationalising Vicentin.
The anger at the move on the agro-giant from the farming and business sectors, the powerful free-market lobbies, brings back memories of the epic stand-off between the administration of then-president Cristina Fernández de Kirchner and farmers over a soybean export duty increase that was eventually defeated in Congress back in 2008.
Time will tell if the delays with the Vicentin and wealth tax bills are a deliberate strategy by the president to buffer the complaints by the lobbies who have historically clashed with Kirchnerismo. The leftist wing of the coalition, loyal to Fernández de Kirchner, now the powerful vice-president, will only have won the day if and when Vicentin is nationalised by Congress and the capital levy bill is approved. The economic outlook is disturbing and signs are starting to emerge too – private airline Latam has announced plans to pull out of the domestic flight market in Argentina.
The coronavirus is now hitting so hard, over 30,000 cases have been detected since early March, with the president now confined to his residence. Those coronavirus cases now include Lomas de Zamora Mayor Martín Insaurralde (a Peronist) and former Buenos Aires Province governor Maria Eugenia Vidal (a prominent member of the opposition coalition). The virus is mainly hitting Buenos Aires City and Greater Buenos Aires (the metropolitan area). Fernández, during that Wednesday night interview, voiced exasperation with those who had lobbied for runners to be allowed out to exercise and for more shops to open in the capital, briefly displaying graphs showing that infections had increased. See what happens when you allow all this, he said.
The president huddled at Olivos also on Wednesday night with Buenos Aires Province’s Kirchnerite Governor Axel Kicillof and Buenos Aires City Deputy Mayor Diego Santilli. Absent was Buenos Aires City Mayor Horacio Rodríguez Larreta, who reportedly met with Vidal before she tested positive for Covid-19.
At issue are the City government’s decisions to allow children out for one-hour walks on weekends, runners out to exercise between 8pm and 8am and the opening of more local shops in neighbourhoods. Polls show that centre-right voters favour easing the lockdown and the mayor is giving the residents who support him in the nation’s capital what they want. Some changes have been made: that permission for exercise will be further regulated and the president has announced that all permits for non-essential workers will have to be renewed. The government's aim is for public transport to only be used by essential workers as the coronavirus pandemic peaks over winter. The ultimate goal is to avoid the collapse of the health system, especially in the poverty-ridden parts of Greater Buenos Aires.
Health officials in Buenos Aires Province, presumably speaking the mind of their Kirchnerite governor, have called in public for the lockdown to continue until September. Officially, the governments in Buenos Aires City (confident it has a health system robust enough to weather the peak of the virus) and Province are still coordinating policies with Fernández at the head of the bipartisan table – but nerves will be stressed if the number of infections continues to jump and the president’s popularity for some reason starts to drop.