President Javier Milei’s transformational drive has to clear four main obstacles – Congress, the street, provincial governors and the courts – of which the former two were more visible last week but all four will need to be overcome. The week’s main battle was last Wednesday’s CGT general strike, while the continuing war in Congress seems likely to stretch into February with the provincial governors forming an intrinsic part of those negotiations and the courts claiming the last word after having already moved against the labour reforms.
The general strike should be deemed not so much a success or a failure as a somewhat irrelevant blip within what gives every indication of being a long hot summer and a traumatic year. Normally a January strike in the midst of the summer holidays would be on a par with hunting tortoises or snails, making failure impossible, although more people are staying in town than usual in this atypically cash-strapped (“No hay plata”) year. Last Wednesday was indeed an extremely quiet day although almost all shops remained open, thus denting the success of the stoppage. Halting transport generally guarantees any strike being effective but the CGT labour umbrella, along with their Kirchnerite and leftist militant allies, sacrificed this trump card on behalf of their cathartic demonstration outside Congress. There the numbers varied wildly from the incorrect 40,000 of Security Minister Patricia Bullrich to the incredible 600,000 estimated by the CGT organisers (1.5 million nationwide) – the real figure would lie somewhere in the middle, closer to the lower than the upper end.
Apart from their often opulent lifestyles, the Peronist trade union leaders have been criticised on this occasion for their double standards in launching a general strike only six weeks into this administration while tolerating four years of real wage erosion under the Alberto Fernández Presidency without a single stoppage but perhaps the main point against these dinosaurs is their obsolescence, forfeiting any claims to lead or represent a fragmented working class from their refusal to evolve into the changing labour world of technological revolution. Trade union chieftains have nothing to offer the informally employed half of the workforce outside collective bargaining or the self-employed, all too many of whom voted last year for a Milei dismissing labour bosses as a “caste,” a setback they have yet to digest.
Setting a date for a general strike is one thing and for parliamentary passage of the omnibus law reform package quite another – the devil lies in the detail and the details of that originally 664-article monster are so numerous. Last Saturday and last Thursday were successively presented as D-days for submission to the House floor with both turning out to be wishful thinking and nor should such profound transformations be bulldozed. This bill may have been defined as “all or nothing” by the zealous convert Bullrich but it is not seen that way by Milei, whose ultimate objective beyond passage of any law is zero deficit – if his tiny caucus and its uncomfortable allies cannot do the trick in Congress, the necessary cuts will be made elsewhere with the question becoming: At whose expense?
The governors suspect that their provinces could be first in line, hence their extreme sensitivity and interest in the intense negotiations. The issue of export duties is a dilemma for them – strongly rejected inland (where Milei obtained most of his votes last year), the governors are obliged to oppose them in order to stay popular, but the alternative could take the form of being forced into the austerity at home which Milei is pushing at a national level by being denied federal payments. Other options for cuts beyond those before Congress could include the costly Tierra del Fuego industrial promotion scheme of tax breaks and protection (where Economy Minister Luis Caputo’s cousin, Nicolás Caputo, is a leading beneficiary) or taking a much closer look at state companies and trust funds.
Another sensitive area is pensions, where the government has belatedly discovered that if it wants to save, it could do far worse than the extant updating mechanism inherited from their Peronist predecessors (a 2023 hike of 110 percent in a year of 211 percent inflation). Whether the government can cynically maintain this system until April before linking pensions to inflation and whether this linkage is to be monthly or bimonthly are being hotly debated by opposition deputies.
Yet perhaps the central question facing Milei is whether his popularity in the liquid social networks can resist the obliterated purchasing-power of an increasingly liquid peso.