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Tensions as Argentina’s lower house passes austerity budget
BUENOS AIRES, Oct 26, 2018 (BSS/AFP) – Lawmakers in Argentina’s lower
house of Congress on Thursday approved an unpopular austerity budget designed
to meet the stiff requirements of a $57 billion International Monetary Fund
bailout.
The final pre-dawn vote came after a marathon, rancorous debate and a day
of unrest that saw police fire tear gas and rubber bullets at demonstrators
throwing rocks outside the legislature building to protest a bitter cocktail
of tax increases and spending cuts.
Factions of the leftist opposition backed President Mauricio Macri’s
center-right Cambiemos coalition to pass the bill in a 138-103 vote with
eight abstentions.
The draft now goes to the Senate, where it is expected to win final
approval.
Unions and the leftist opposition have criticized Macri’s program of
sweeping spending cuts to meet the deficit reduction requirements of the IMF
loan, originally approved in June before being increased at Macri’s request
this month.
The budget left a bitter taste on the streets and further protests are
expected.
“The same deputies and senators should start cutting their own budgets,
because we have had to take cuts for health and schooling,” said retired
construction worker Orlando Cesar.
The bailout is supposed to help Argentina recover from an economic crisis
that has seen the peso lose half of its value this year.
Inflation is forecast to finish the year at 40 percent and the economy is
expected to shrink by 2.6 percent.
– ‘In crisis’ –
“We are in a crisis and the government must take responsibility. Social
problems and the recession oblige us to pass the law,” Cambiemos party
lawmaker Mario Negri said in a speech after the budget passed.
“To have no budget would be a defeat for the country,” he added.
Macri has pledged a swathe of cuts in health, education, science,
transportation, public works and culture to the tune of $10 billion.
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ARGENTINA-BUDGET-IMF 2 LAST BUENOS AIRES
During a fraught day Wednesday, demonstrators outside the legislature
shouted “No to the IMF budget. Don’t cut our future!” while inside, tempers
ran high as lawmakers traded insults ahead of the vote.
Nine police were injured in the clashes, authorities said, while 26
demonstrators were briefly detained.
“This is a prejudicial budget for the nation and we are not employees of
(IMF chief) Mrs (Christine) Lagarde or President Macri — we are
representatives of the people,” Agustin Rossi of ex-president Cristina
Kirchner’s Front for Victory party said after the vote.
Street protests have reflected growing public anger after Macri slashed
traditionally-safe civil service jobs as part of a bid to cut Argentina’s
fiscal deficit and tame inflation at the IMF’s behest.
The budget deficit was 3.9 percent of GDP last year. The government aims
to get it down to 2.7 percent in 2018 and zero by the end of next year.
To halt the collapse of the peso back in April, Macri’s government reached
a bailout deal with the IMF, with which Argentina had practically severed
relations after defaulting on its foreign debt in 2001.
– Street demos –
Analysts say a default is less likely this time but they are concerned
about Macri’s ability to both push through the measures demanded by the IMF
and hold onto power in next year’s general election.
“Everything that is not social spending has been cut back, fiscal policy
is already having spillover effects, and the idea of that deepening in an
election year is a novelty,” Matias Carugati, analyst at Management and Fit,
told AFP.
The austerity plan faces stiff opposition in Argentina, where strikes and
demonstrations have become the norm over the past few months, amid falling
income and increased poverty.
More than 27 percent of the population are listed as living below the
poverty line, and the South American country has an unemployment rate of 9.6
percent.
Opposition leaders condemned Wednesday’s street violence, saying
extremists had infiltrated orderly demonstrations.
Dozens of people broke away from the main union demonstration to attack
the police protecting the legislature.
Smashing concrete park benches, they lobbed debris at the police using
slingshots, set rubbish containers on fire and used homemade weapons to send
fireworks rocketing directly at police cordons.
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