In Argentina, the truce is over: unions pick their fight in an election year

President Mauricio Macri faces his biggest challenge since taking office 15 months ago

CARLOS E. CUÉ

Buenos Aires 7 MAR 2017 - 13:01 ART

Argentina is a circular country. It is in constant movement, but always seems to go back on itself. Its economy, understanding of which defies conventional economic theory, returns inevitably to the same pattern: in election years there is growth and inflation, and then the following year, recession and devaluation.

Striking Argentinean teachers stage a protest in Buenos Aires. TELAM

Politics too has its pre-set coordinates: if the Peronists are in power, the unions, the majority of which are also Peronist, are peaceful, even if there is an economic crisis. If the Peronists lose power, the labor unions take to the streets and try to help retake it. The Radical Party’s Raúl Alfonsín, the first democratically elected president after the military dictatorship of 1976 to 1983, endured 13 general strikes during his six years in office.

At first it seemed as though Mauricio Macri had broken the pattern: despite an ongoing economic crisis and despite not being a Peronist, he has enjoyed 15 months of relative calm since taking office in 2015.

Amid the chaos, the president needs to show his moral authority

Now, the truce is over. With the end of the summer holidays and the country’s return to work, so Argentina returns to its circular ways: a 48-hour strike by teachers, huge demonstrations by labor unions ahead of an announced general strike, a soccer season delayed by striking players, public services on the verge of collapse, power cuts and former president Cristina Fernández de Kirchner embroiled in corruption allegations.

The peace that has cost Macri so much effort, and so much money, is over. The Argentinean president had managed to win the support of the all-powerful unions, their leaders regular visitors to the Casa Rosada presidential palace in Buenos Aires over the last year. Macri was even accompanied by union bosses such as Momo Venegas on his trip last month to Spain in a bid to show investors here that they could trust a man who had the support of the key figures in negotiating salaries.

In 2016, the country’s state schools resumed classes after the summer break and there were no major strikes, despite rampant inflation of 40%, although Macri was obliged to grant pay rises of up to 38% to some workers.

Macri found the money to fill the labor unions’ coffers and to top up their social security fund, which pays for its members’ healthcare, some of it provided by their state-of-the-art hospitals. He even traveled to the Vatican to ask Pope Francis to exercise his influence over the unions and persuade them to keep the peace. And he succeeded.

This is what Argentineans call “gradualism.” To prevent unrest and for his minority government to survive, Macri chose to spend public money and avoid a radical adjustment, although he still had to hike gas, water, and electricity prices by more than 500%.

The start of the soccer season has been delayed by a players’ strike

In the process, he deepened the country’s debt, and now that debt is driving up the price of the dollar and sending the value of the country’s currency down, making Argentinean businesses even less competitive. As a result, some employers are beginning to lay workers off, others are cutting back production and others are stopping overtime; some businesses are even closing down. And to top it all, the unions have now decided to end their truce.

In reality, say the majority of Argentinean analysts, this isn’t about the economy. In Argentina, politics is all: a dog-eat-dog fight for power, whether to do with the future of soccer or industrial relations. It is worth remembering that some of the best-known labor leaders are deputies and senators who lead key sectors of the Peronist Party. This is where the explanations as to what is really going on are to be found.

In October, most Argentineans go to the polls in congressional elections. The Peronist Party is without a leadership. Which means that the battles being unleashed in Argentina as the country returns to work are essentially an internal dispute to see who will lead the opposition and how to work out the strategy to overthrow Macri.

Which is why the president, who needs to demonstrate his moral authority amid this seeming chaos, seems prepared to stick to his guns and not give in to the unions, particularly the teachers.

As tends to happen in Argentina, a country where despite the shouting, agreement is almost always reached at the 11th hour, the present rupture will not be definitive. The circle has to keep turning. Which is also Macri’s main problem: that the country will assume that in time, things will return to the way they always have been.

English version by Nick Lyne.