What we learned this week: July 10 to 17

THE WEEK IN CORONAVIRUS

Argentina finally hit the dreaded milestone of 100,000 coronavirus deaths in midweek, reaching 101,158 deaths by press time yesterday with 4,737,213 confirmed cases of coronavirus contagion as against 98,148 deaths and 4,627,537 cases the previous Friday. Over the weekend the government signed a contract with Moderna for the supply of 20 million doses of vaccine by the United States lab as from the first quarter of next year with Moderna confirming the agreement on Monday. Health authorities estimated that Moderna could be approved for inoculation in those aged under 18 (an age-group lacking any vaccine until now) in the course of this month by Anmat (the Argentine equivalent of the Food & Drug Administration). Even if the daily entry cap was raised from 600 to 1,000 passengers, the plight of those stranded abroad by flight restrictions was highlighted by a couple of high-profile examples – both ex-president Mauricio Macri and Senator Esteban Bullrich in Switzerland and the United States respectively had their flights cancelled (the former reportedly not unduly distressed by the delay since it keeps him out of thick of Juntos por el Cambio opposition infighting over midterm candidacies, as well as facing Bolivian charges of fuelling repression). Prepaid health schemes received some financial oxygen on Wednesday when a court ruling authorised them to raise their quotas by 26 percent as from September. On Thursday two Aerolíneas Argentinas aircraft flew out to Memphis to pick up a US donation estimated at over three million doses of Moderna while President Fernández announced that Moscow had authorised the packaging of Sputnik V vaccine in this country.     

CASO CORREO ARGENTINO

The bankruptcy of the Correo Argentino post office (the property of a holding of the Macri family) ruled by judge Marta Cirulli earlier this month was suspended last Wednesday when the same magistrate accepted the appeal of defence lawyers to pass the case to the Commercial Appeals Court for review. 

BOLIVIAGATE

Plenty of political back and forth last week over allegations that the Mauricio Macri administration had supplied Bolivian authorities with live ammunition and tear gas to repress social protests by followers of ex-president Evo Morales in late 2019.

ELECTORAL SHUFFLE

Last Wednesday the deadline for the court presentation of electoral alliances in this city expired with the locally governing Juntos por el Cambio presenting a 14-party combo including its three main components (PRO, the Radicals and the Civic Coalition), other previous allies and also some newcomers, notably GEN (led by Margarita Stolbizer) and Republicanos Unidos (under former Economy minister Ricardo López Murphy). The latter will compete within this alliance in the September 12 PASO primary against the main list headed by former Buenos Aires Province governor María Eugenia Vidal, who last week recruited Martín Tetaz, an economist with a high media profile. For her part Stolbizer confirmed that she would be remaining within the fold in the City but backing the Radical list under neurologist Facundo Manes in the Buenos Aires Province PASO primaries. Elsewhere in the country Juntos por el Cambio managed to reach agreement on a single list in 20 provinces while the ruling Frente de Todos coalition succeeded in dodging competitive primaries in 18 of the 23 provinces. On Thursday City Mayor Horacio Rodríguez Larreta boosted his dominance of the opposition when outgoing Vicente López Mayor Jorge Macri backed out of challenging Deputy City Mayor Diego Santilli in the Buenos Aires Province PASO primaries, thus uniting PRO centre-right party against the Radical list headed by Manes.

PENSION BOOST

The government announced last Tuesday an extraordinary bonus of 5,000 pesos next month for the over six million pensioners who collect up to twice the minimum retirement benefit (46,130 pesos). Around five out of every six pensioners thus stand to pick up this bonus aimed at compensating for the ravages of inflation. Announcing the bonus alongside President Alberto Fernández in Lomas de Zamora, ANSES social security administration chief Fernanda Raverta pointed out that the Frente de Todos government had doubled the minimum pension to 28,065 pesos from 14,068 pesos at the end of 2019. In the first half of the year pensions rose 21.2 percent as against 25.3 percent inflation, thus prompting a government facing midterm elections to offer the bonus. The move is seen as part of a general acceleration of public spending in the second half of this year with the midterm results in mind.

50% ANNUAL INFLATION

Last month’s inflation was 3.2 percent, INDEC statistics bureau reported on Thursday, thus pushing annual inflation beyond 50 percent (50.2 percent) with 25.3 percent in the first half of this year. Not only do these figures virtually obliterate the 2021 Budget forecast of 29 percent but they considerably lengthen the odds against improving on last year’s annual total of 36.1 percent. Core inflation was 3.6 percent with the key food and beverages item identical with the general average at 3.2 percent.

IMF TALKS WARM UP

Economy Minister Martín Guzmán started off the week at the G20 ministerial summit in Venice where he proposed Argentine participation in debt-for-nature swaps, also having the chance to talk to various colleagues including United States Treasury Secretary Janet Yellen as well as International Monetary Fund (IMF) Managing Director Kristalina Georgieva. In his weekly Thursday briefing IMF spokesman Gerry Rice referred to these talks as “very productive” without adding anything new to negotiations beyond confirming that Argentina was seeking to transform its stand-by loan into an Extended Fund Facility, a longer-term arrangement.

MARKET WATCH

The “blue” dollar, the main parallel exchange rate, closed the week at 179 pesos as against 174 pesos the previous Friday. The official exchange rate inched up to 101.25 pesos from 101 at the close of last week as quoted by Banco Nación or 167.72 pesos with the 65 percent surcharges for purchasers, below the “blue.” Among the unofficial but legal alternative exchange rates, the CCL (contado con liquidación) dropped to 166.16 pesos from 167.20 pesos the previous Friday after the Central Bank used the Independence Day long weekend to sneak in new restrictions (including capping bond transactions at 50,000 pesos) while the MEP (mercado electrónico de pagos) also dropped from 166.40 to 165.50 pesos in the course of the week. Country risk closed the week at 1,581 points as against 1,612 the previous week, perhaps helped by the sight of Economy Minister Martín Guzmán chatting with International Monetary Fund officials in Venice.

PROTEST SEASON

Downtown traffic was plunged into chaos by social protests at various times last week, especially on Monday and Thursday. Social protests in the first half of this year were reported as 60 percent up on the same period in 2020 (whose second quarter in particular was muffled by quarantine) with 2,400 episodes of picket blockades or demonstrations.

CRONISTA

Grupo América finally completed last Tuesday the purchase of the newspaper El Cronista Comercial and all its associated products from businessman Francisco De Narváez for US$6 million. The group headed by José Luis Manzano, Daniel Vila, Gabriel Hochbaum and Claudio Belocopitt thus continues expanding its media empire. Interviewed last weekend by Perfil CEO Jorge Fontevecchia, Manzano said that he would respect “the editorial autonomy of El Cronista” as a “niche product based on quality.”

PRIEST

Convicted Italian priest Father Nicola Corradi, 84, sentenced two years ago to 42 years imprisonment for raping and abusing deaf-mute children at the Próvolo Institute in Mendoza (closed down since 2016 as a result of the scandal), died last Wednesday in that city where he had been serving house arrest due to his age and fragile health.

COPA AMÉRICA FINAL

We are the Champions! Argentina won the Copa America last weekend, thanks to a 1-0 win over hosts Brazil.