Carry on Carrió

By M. B. Gambarotta

There was a certain degree of anticipation on Sunday. At issue was the political future of Elisa Carrió, a maverick lawmaker who is a member of President Mauricio Macri’s centre-right coalition Cambiemos (Let’s Change). Carrió attended a lunch time television show to much anticipation. But, contrary to what was expected, she fell short of confirming that she will run for Congress in Buenos Aires City. Instead Carrió, who leads her own centrist party and has often voiced criticism of the president, said that she was not running for the Senate in Buenos Aires province. Carrió said that Buenos Aires Governor María Eugenia Vidal, a key Macri ally, did not want her running in her territory.

It’s still likely that Carrió will end up running for the Lower House of Congress in Buenos Aires City. But her statements on Sunday were flummoxing and will fuel speculation about the ruling coalition’s electioneering. Carrió was not doing Vidal, who according to polls the most popular politician in the land, any favours by declaring she “did not want her.” Carrió portrays herself as an anti-corruption crusader who only reports to the president. Her “disagreements” with Macri on how to best fight corruption include her recent bid to impeach Supreme Court Chief Justice Ricardo Lorenzetti for malfeasance.

Macri needs to make the right choices ahead of the midterm elections. The mainstream way of looking at the election is that Cambiemos needs a win to confirm that the president is effectively in control of the nation after announcing a series of tough decisions, including massive utility rate hikes. Yet it’s not certain that Cambiemos will win. Questions are being asked about the economy and what effect it will have on the result of the election. Finance Minister Nicolás Dujovne has even dared to declare that he “can’t turn into a populist” because of an election.

Cambiemos still hopes the election will be about voting against the old school Peronists and the populists. But what if the election is about the mediocre economy? The INDEC statistics bureau reported on Tuesday an inflation rate of 2.4 percent in March. Almost immediately the Central Bank announced it is jacking up the benchmark annual interest rate to 26.25 percent — effectively admitting that inflation has not gone away. The Central Bank is still shooting for an annual inflation rate of 17 percent. But few observers now believe the government will hit that target.

Still Macri is trying to come out punching after the massive April 1 demonstrations in his support that took place nationwide. Some polls now indicate that the drop in Macri’s popularity has stopped after April 1. But a closer look at those polls show that the public now thinks that bleak economic times are ahead. Ultimately only the election result will reveal if voters are more interested in political confrontations or more concerned about their economic future. The Cabinet is now having to deal with rumours of infighting in Macri’s economic team over the Central Bank’s decision to drastically increase interest rates (a decision that will strengthen the peso).

It’s not clear whether the Macri administration is doing a good job at spinning stories or if it is simply fooling itself into thinking that it can win the election with an inflation rate which could end up hitting 25 percent this year.

Carrió’s comments on Sunday show that the ruling coalition must also deal with its contradictions. Already Martín Lousteau has quit as Argentina’s ambassador to Washington. Lousteau is now considered a foe by Cambiemos who could run for Congress in Buenos Aires City without the blessing of the president and his inner circle. Observers say Cambiemos needs Carrió to run in Buenos Aires City to defeat Lousteau, who came close to pulling off an upset victory in the 2015 mayoral elections against Macri’s candidate (the current BA City Mayor Horacio Rodríguez Larreta). Macri’s party has won in Buenos Aires City since 2007. Lousteau is not welcome as an internal rival even when he has the backing of a sector of the Radical Party, which belongs to Cambiemos.

There was also some high-profile arguing going on at the Energy Ministry headed by Juan José Aranguren. Aranguren’s number two, one José Luis Sudera, resigned complaining about authoritarianism by the minister. Resignations happen. But the tone of Sudera’s letter of resignation was odd (the outgoing official confessed to being a political novice) and it contained fierce criticism of Aranguren., the man in charge of increase the utility rates.

Dujovne’s comments meanwhile show that the government is fully aware that it will eventually have to tackle the deficit not by issuing debt, but buy performing some serious belt-tightening. The row surrounding the dismissal of the Macri-appointed head of the mammoth INCAA film institute might sound anecdotal. But it appears that the Macri administration is using INCAA’s reform (citing corruption) as a symbol of the shape of things to come. INCAA’s outgoing head voiced disgust at his ousting amid speculation that he was forced out for not getting rid of managers appointed in the Kirchnerite era. More significant cuts are also being announced at the Defence Ministry. The austerity will get deeper if Cambiemos manages to win the midterm elections.

The president thinks that he is effectively picking up the banner of the April 1 demonstrations by declaring his determination in crushing the country’s “mafias.” Macri is also backing Vidal in her standoff with the teachers’ unions over salaries. Police used force on the rainy night of April 9 to evict a small group of union leaders and teachers aiming to put up scaffolding to install a “roving school” outside Congress. Security forces had also clashed with leftwing demonstrators blocking a highway during the national strike called by the General Labour Confederation (CGT) on April 6. But the Sunday night clashes with the teachers outside Congress looked uglier. The use of force was purportedly ordered by the president himself. Yet the Buenos Aires City government has now granted a permit and the makeshift school has gone up outside Congress. The teachers’ temporary school protest echoes the “white tent” pitched to great effect by the education sector unions to battle the neoliberal economic policies of then president Carlos Menem in the nineties.

What makes things more complicated for the Macri administration is that polls show that while the majority of the public does not favour roadblocks and trade union protests it also does not agree with the use of “repressive” force to deal with them.

The permit for the teachers’ unions’ makeshift school has been granted for a week. But the teachers’ conflict will not have gone away by then. Macri senses that he has picked the right fight by singling out for an argument the old school Peronists and former president Cristina Fernández de Kirchner. But at this stage it’s not clear whether the election will end up being about abstract ideological bickering or stagflation. Dujovne might not want to pose as a populist for the sake of winning an election. But, if the vote is effectively about the economy, somebody else will.

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