Between a Rocca and a hard place

Last week it looked like the coronavirus crisis had softened the political rift that has gripped Argentina for nearly two decades since the rise of Kirchnerismo in 2003. Look again.

President Alberto Fernández, a Peronist, is still calling for unity, but there is now a pulsating challenge to that notion even when polls show that his popularity is on the rise. Is conflict coming back? There are signs – one this week was the decision by the construction arm of steel giant Techint to terminate the contract of 1,400 construction workers.

The decision, in the middle of a pandemic, did not go unnoticed. Prominent government officials and militant Kirchnerite figures did not hesitate to attack Techint supremo Paolo Rocca (one of Argentina’s wealthiest men). Fernández, without naming Rocca, initially complained about “miserable” business leaders jumping at the chance to sack workers. The president then urged Rocca to cut it out and accept that he was going to make less of a profit in these sickly times. The president’s use of the word “miserable” ruffled some expensive feathers in the business sector and appeared to ignite ire.

Techint said it would not budge, declaring that it was playing by current labour regulations in the construction sector. The economy has been thumped and building has been halted by the lockdown, which on Sunday was extended by the president until April 12.

The government fired back at Techint with an emergency decree banning unilateral dismissals and suspensions for 60 days. Still, the decree allows companies to negotiate suspensions (with salary reductions) with Argentina’s trade unions. The ItalianArgentine conglomerate faces a public relations disaster in the middle of what is being billed as a war against an invisible enemy. But then again, the news is moving so fast that already the conflict is a thing of the past.

Regulation, however, will not go away. At the time this column was being written controversy was raging over reports the national government was considering the possibility of issuing a decree to place the healthcare system, in its entirety (including private insurance and infrastructure), under state control. Talk of a potential decree to centralise healthcare, leaving it on the verge of nationalisation, came a day after the president attended the opening of a new clinic on Wednesday in Buenos Aires City owned by the truck-drivers’ union, headed by the veteran boss Hugo Moyano.

The clinic has now been hired by Buenos Aires Province (ruled by progressive Kirchnerite Governor Axel Kicillof) to boost the number of available hospital beds. It was no straightforward hospital opening – the president showered praise on Moyano, a controversial figure for conservative middle class sectors given his aggressive approach to voicing demands and accusations that he has amassed a fortune by awarding contracts to cronies.

The trade unions still consider themselves to be the backbone of Peronism and Fernández is leaning heavily on the labour machine to pull through the crisis. Moyano was a key ally for Néstor Kirchner during the late president’s 2003-2007 spell in office (Fernández was Cabinet chief at the time). But after Kirchner’s sudden death in 2010, Moyano’s ties with then-president Cristina Fernández de Kirchner soured to the point of turning ugly. The warring Peronist factions, including Moyano, united last year to back the Frente de Todos coalition in the election that Alberto Fernández won. Notably, Moyano has often clashed with the bosses of the General Labour Confederation (CGT), who are used to cultivating friendlier ties with business leaders.

The pandemic was bound to shake up Argentina’s singular healthcare system. It hinges on a combination of private insurance, trade union-controlled healthcare schemes funded by employee contributions, and nominally universal state coverage. Ultimately, all of those sectors are bankrolled by a massive fund managed by a government agency (especially to pay for the treatment of critical patients across the system). Moyano rescued a clinic that for years was part of that system to the point that the president, who turned 61 on Thursday, noted in his speech that he was born there. The powerful trade unions are part of the healthcare equation, often plagued by mismanagement and siphoning of funds by all sectors, and they are united behind Fernández.

The nation also appears to be united behind its healthcare workers. Every night at 9pm applause thunders out from apartment blocks and houses nationwide to express gratitude for those on the frontline of the fight against the coronavirus. But for a couple of nights this week, at 9.30pm. hundreds also banged pots and pans in a loud cacerolazo protest calling for politicians to lower their salaries and to demand more extensive coronavirus testing. The pot-banging was noisy on Monday – so noisy that it prompted Lower House Speaker Sergio Massa, ex-dissident Peronist turned top member of the ruling coalition, to float a plan to cut lawmakers’ salaries by 40 percent. By Wednesday, the banging was barely audible in some neighbourhoods amid speculation that the protest was being fuelled by sectors of the centre-right coalition Juntos por el Cambio (Together for Change), headed by former president Mauricio Macri.

Buenos Aires City is still a centre-right bastion – the complaining was initially loud and clear in many neighbourhoods on the first night. Yet City Mayor Horacio Rodríguez Larreta, a Macri ally, has been working smoothly with the president and Kicillof during lockdown, despite their political differences. Is there now a sector of the centre-right opposition that is challenging Rodríguez Larreta’s constructive approach? Departed outspoken lawmaker Elisa ‘Lilita’ Carrió, another prominent coalition figure, appears to have sided with Rodríguez Larreta (a potential presidential hopeful in 2023), tweeting that now is not the time to stoke political conflict and hinting at malicious agitation by members of her camp.

The pandemic is unpredictable. It has exposed the cold-blooded ruthlessness of the system. The streets in Buenos Aires are empty, the billionaires are gulping, the trade union bosses are bagging health insurance contracts. Argentina’s restructuring of near US$70-billion worth of debt expected by March 31 is delayed and there are 6.6 million new jobless claims in the United States. Even US President Donald Trump has declared that the economy is now his number two priority. In Argentina, the crisis has arrived with a Peronist president in office who thinks the world economy will change for good after this. His administration seems ready to flex the muscle of the state to the hilt to control the looming crisis. The government is offering soft loans and other breaks to companies, especially small ones, struggling to pay salaries. The repatriation of Argentines stranded abroad has restarted.

The president has won the public’s attention. But there is no way of anticipating if the Monday night protest will catch on and persist as a divisive factor, returning la grieta to the fore. After another week in lockdown the president is not necessarily affable Alberto to everybody – it may be that the virus has not wiped out polarisation after all.