Friday, June 14, 2024

OP-ED | 19-08-2022 13:24

Biting (or braving) the bullet

The renunciation of populist utility bill freezes should be hailed. The Frente de Todos government is at least knocking on the door of the real world even if it has yet to make an entrance.

If Newton’s Third Law tells us that action and reaction are equal and opposite, the same cannot be said about the week’s two main news items – the action on Tuesday in the form of updating public service billing in order to restore some fiscal balance to Argentina’s troubled economy and the reaction in the form of Wednesday’s mass labour protest against the inflation which the gas and electricity bill increases will undoubtedly fuel in the short term at least.

While yet to advance beyond the level of announcements (like the sum total of Sergio Massa’s “super-ministry” to date), the renunciation of populist utility bill freezes should be hailed, even by the social sectors upon whom the main burden now falls after having drawn the biggest benefits beforehand. The Frente de Todos government is at least knocking on the door of the real world even if it has yet to make an entrance.

But malicious criticism aside, the doubts are without doubt justified. Even if everything goes according to plan with electricity bills trebled for over 40 percent of households by the end of the year, the energy subsidy mountain will be reduced by less than a third in the best of cases and the devil lies in the detail when it comes to implementing segmentation. Nor should the role of the courts be underestimated. This week we have finally seen City Hall announcing an end to the absurd regime whereby the cranes towing away illegally parked cars paid a frozen monthly licence fee of 55,000 pesos while walking away with a business worth over half a billion pesos annually – that 55,000 pesos was neither more nor less than the entirely reasonable 2008 licence fee maintained year after inflationary year via court injunctions. Ironically enough, the courts now so direly jeopardising Vice-President Cristina Fernández de Kirchner’s entire political career could be her best friends when it comes to defending populist pricing. But far too early days to draw any real conclusions about Tuesday’s announcements – as always, the proof lies in the pudding.

The reader will hopefully forgive this editorial for prefacing the CGT protest with a protest of our own. The downtown traffic havoc was so massive that our tiny staff was forced to replace Barracas newsroom teamwork with home office that day while at least one personal acquaintance needed three hours to find her way home 40 kilometres away – microscopic examples of the colossal disruption caused even by a protest literally dampened by a cold and drizzly day. If the pickets of the jobless and underemployed should understand that hampering those who pay taxes towards their social plans from going to work does not help anybody, then unionised workers should understand that point even more.

Having said that, it is not as if organised labour had nothing to protest, given the relentless erosion of their real wages. Not that it comes very naturally for the traditionally Peronist trade unions to protest against a government premised on the unity of their own movement. Nor did the vice-president make it any easier to refrain from an anti-government protest with her proposal of freezing collective wage bargaining until March while awarding a 70,000-peso bonus between November and December – a formula which might benefit her electoral base among the underpaid of Greater Buenos Aires but is unlikely to go down well with many trade unions, not the moderate mainstream but not even those trade unions under Kirchnerite leadership but enjoying superior wage brackets like the teamsters or the bank clerks (as CGT secretary-general and teamster boss Pablo Moyano made crystal clear last Wednesday). Yet the political alternative to government disintegration in the form of a likely opposition victory next year and the prospect of labour reform would be even less congenial.

All baby steps for an economic (semi-)czar who had yet to name his deputy minister at the time this editorial was written, after over a fortnight in office. The jury is still out on a perplexing minister who deserves neither criticism for promising steps in the right direction after two decades of almost uninterrupted populism nor support from the way he is making them. Even if social patience barely lasts 100 hours nowadays, this new helmsman should be given his 100 days.


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