POLITICAL CLIMATE REPORT

trips. These measures were only applied in high in only applied were These measures trips. group suspending and 20people; over meetings outdoor and meetings social indoor private essenti a night included Restrictions crisis. health thepublic discuss to leaders provincial and authorities health with follo isolation in was who weeks. three next the during and extending 9 April on beginning rates, contagion with high districts res new announced Fernández Alberto President April 7, on in cases, increase of the As result a deaths. 59,000 under just and cases million of 2.6 a total recorded has Ma and Kingdom United Janeiro, Riode the as such virus, of the variants contagious more that confirmed was it time, thesame Around days. consecutive several for new highs reaching and October hits. wave second a as activities social and economic on restrictions new implementing begun has government national Argentina’s opening, greater of period a and following lockdown strict entering first after A year as second restrictions fresh imposes Government increases theU.S. with engagement high and continue in tensions as obligations debt renegotiate continues to Argentina level, international as advancing are relief measures economic Congress, In elections. postponing of possibility the about continues debate steadily as advancing is campaign vaccination Argentina’s Meanwhile, themselves. governmen in halt to thedecision with politicized, more even become has measures the around debate year, the electoral an In fresh lockdown. of a impacts economic and thepolitical minimizing while collapse system a health to avoid is seeking The government highs. record COVID second as a area metropolitan Aires Buenos the in activities social and on economic restrictions new implementing has begun government national Argentina’s 16April Political Climate Report (USA) 3204 233 +1 (646) (11)+54 (ARG) 0991 5238 www.cefeidas.com [email protected] República Argentina C1428AFB Ciudad Buenos de Autónoma Aires Ing.Antonio 1830 Arcos CONTACT INFORMATION C - OVID al workers, educators and students; closing bars and restaurants at 11 PM; banning banning 11PM; at restaurants bars and closing students; and educators workers, al person classes becoming a flashpoint between the the between a flashpoint becoming personclasses

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wing confirmation that he had COVID he had that confirmation wing early April to over 20,000 per day, exceeding the peak hit in in hit peak the exceeding day, per 20,000 over to April early Katrina Cohen Cosentino Cohen Katrina [email protected] Cook Megan [email protected] Díaz Juan Cruz POLITICAL ®ULATORY RISKS - ajabornisky Jabornisky Agustina [email protected]

ARGENTINA .

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Congress opens with hybrid sessions and and sessions hybrid with opens Congress COVID Follow@CefeidasGroup Debate continues about postponing postponing about Debate continues Update on vaccination campaign vaccination on Update - 19 response highly politicized in in politicized highly response 19 Update on Argentina’s foreign foreign on Argentina’s Update

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halting most commercial activities nor the day had urged to remain suspending in-person classes. Governors home unless going to work or school and

were encouraged to take measures in their confirmed that the UK and Manaus variants

ARGENTINA

– jurisdictions. had increased circulation (although are not yet dominant). Stricter measures were

PCR PCR However, despite the measures, case delayed due to disagreements between

numbers failed to decrease, building the administrations of different

pressure for additional restrictions. On jurisdictions and varying viewpoints

April 13, cases hit a new all-time high of within the government. Moreover, 27,001 as deaths creeped upward towards tensions have arisen between the 400. On April 14, 25,000 cases and 368 national government and provincial deaths were confirmed, and 62.7 percent of governors due to the latter failing to ICU beds are occupied nationwide. In the take measures to curb the spread of Buenos Aires metropolitan area, ICU bed COVID-19, which the national occupancy is over 71.4 percent, with many government sees as a refusal to areas in the City of Buenos Aires at full assume any political cost. However, the capacity, causing increasing worries. In this critical situation pushed the national context, late on April 13, President Alberto administration to take action. The national Fernández led a virtual meeting with part of government had been reticent to the cabinet to analyze the implementation impose a strict lockdown due to the of “targeted and strict measures” in the economic impact and political cost this Buenos Aires metropolitan area, where over could imply, especially as it faced 50 percent of cases are concentrated. significant criticism last year for repeated extensions of the lockdown. Consequently, on April 14, just a week However, in recent private polls, there has after having announced the previous been a gradual increase in approval for measures, President Alberto implementing stricter measures, and Fernández announced increased pressure has built as cases and ICU restrictions focused on the Buenos occupancy continue to rise. The Aires metropolitan area (AMBA) and government can hardly afford the political aimed at limiting circulation and impact of a health system collapse. promoting social distancing. The new measures extend the daily curfew to 8 PM Previously, the government had been to 6 AM. All social, cultural, religious events hinting for weeks that new restrictions in enclosed space are banned, and could be on the horizon, especially as restaurants must operate delivery only cases rose in neighboring countries after 7 PM. Schools will close and return to such Brazil, Uruguay, Paraguay and online class for the next two weeks. Chile and as second waves were Industrial activity and construction will not reported across Europe and the United be affected. Provincial governments may States. In mid-March, as the one-year choose to implement the measures if the anniversary of the strict lockdown governors decide to do so, but the implemented in March 2020 was restrictions will only be imposed in the approaching, there were already signs that AMBA by the national government. The a second wave was on the horizon, and the government has said security forces will government began setting the stage for ensure compliance. new measures. On March 18, President Alberto Fernández took to the airwaves for Analysis a nationwide broadcast (known locally as a

The announcement came after urgent meetings held between the president and part of the cabinet, and calls from National Health Minister , who earlier in

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cadena nacional), warning about a possible Government looks to fight inflation second wave and difficulties securing with price controls, Supply Law

vaccines. The lack of any concrete ARGENTINA Inflation in March hit 4.8 percent, the highest

– announcement made clear that the monthly inflation figure since September 2019. purpose was to begin paving the way The number brought inflation to an accumulated

PCR PCR for future measures, which were 13 percent so far this year, and 42.6 percent over discussed in various meetings between the last 12 months, according to the national statistics agency. Prices for food and beverages national and provincial authorities

increased 4.6 percent from February. Although the

without any changes. Later that month, government has continued to express that it Health Minister Carla Vizzotti and Cabinet believes that inflation will slow as the year moves Chief gave a short press on, the latest figures call into question its 29 conference ahead of the Easter holiday long percent inflation goal for 2021. weekend, calling for personal responsibility As such, in an effort to lower inflation expectations, and giving national public sector workers the government has been intervening in the home office for the week. In the absence of economy through different methods: a renewal of stricter national measures, in the following the Precios Cuidados and Precio Maximos price days, several provinces begin implementing control programs, freezing public services tariffs, and by threatening to apply the Supply Law (which curfews and circulation restrictions at the authorizes the government to force a business to local level. sell inventory) to companies allegedly hoarding construction materials. The government is also looking to monitor the process of beef exports, and However, the government’s initial implementing programs to ensure meat is response focused on reinforcing available domestically at accessible prices. controls at the border and appeals to Additionally, in mid-March, the government personal responsibility. For example, on announced it would begin requiring large companies in certain sectors to provide monthly March 26, the government extended and information on their prices, sales and inventory. strengthened restrictions on international The government announced the measure in the travel. Flights from Brazil, Chile and Mexico context of rising inflation and amid concerns that were suspended (additional to the existing a second wave of COVID-19 cases could contribute suspension on flights from the United to product shortages. Kingdom and Northern Ireland), and new reached 11 percent, a 0.8 percentage point testing requirements imposed for entry. decrease compared to The prohibition on international tourism was additionally extended through the end the prior quarter, but an increase of 2.1 of April. Finally, in early April, the percent year-on-year despite the government announced the measures prohibition on layoffs and mandated double described above, which were rather severance pay that were in place limited and somewhat delayed even as throughout the year (and remain in force). concerns about the public health Additionally, by the end of 2020, 31.6 situation were growing. percent of Argentine households—42 percent of the general population and 57.7 The government put off stricter percent of children— were below the measures in part due to concern about poverty line. This represents a 6.5-point economic impact, especially in an year-on-year increase of people below the election year (see below). For example, poverty line. new restrictions were delayed until after the Easter holiday weekend in which many However, monthly activity indicators, people travelled while cases were hitting including in key sectors like new peaks. The country's GDP dropped 4.3 manufacturing and industry, as well as percent in the last quarter of 2020, capping tax collection figures suggest that a off an annual contraction of 9.9 percent, tepid but consistent economic recovery according to the latest official figures. In the has begun. The latest estimates from the fourth quarter of 2020, unemployment International Monetary Fund and World Bank expect the country’s economy to grow

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5.8 percent and 6.4 percent this year, Vaccination campaign continues respectively. New measures risk advancing amid concerns about undermining these positive trends

ARGENTINA shortages

– (which in any case will only begin to put the economy on a path to Despite scandals and criticisms, Argentina’s vaccination campaign is advancing. As of April 15, PCR PCR recovering from a three-year recession 11.69 percent of the population had received at least that was exacerbated by the one dose. On a dose per million residents basis,

pandemic), and the government has Argentina exceeds the world and regional average

come under pressure from unions, and is among the top countries in South America, industrial chambers and some social behind Chile and Uruguay and on par with Brazil. As movements to avoid sweeping districts have advanced with vaccinating priority groups (health care and security workers, teachers measures that could halt production or and the elderly), they have been gradually lowering businesses. Cognizant of the impact of age requirements, although still remaining focused restrictions, the government has on older age (60+) populations. announced a supplementary bonus of ARS While vaccines have been arriving steadily since late 15,000 (UDS 162) will be given to last year, there is uncertainty and consistent beneficiaries of social plans and low-income concerns about interruptions due to shortages. independent workers in the Buenos Aires Argentina has signed agreements to receive more metropolitan area. than 66 million vaccines but to date has received just more than 7 million doses, including the first batches of the AstraZeneca vaccine allocated to the country COVID-19 response highly politicized through the COVAX initiative that arrived in March. in electoral year Most delivery dates are not yet set, and in the short- term, it is possible that production and distribution delays interrupt the progress of the vaccination The government’s hesitation to campaign. On April 14, as several districts reported implement new measures can be having applied all of the doses they had received or attributed to political and electoral that they would run out in the coming days, the concerns. On the one hand, opinions national Health Minister confirmed that the next shipments of vaccines were not yet set. are divided both within the Subsequently, the government confirmed that new government and opposition about how shipments of the AstraZeneca and Sputnik V to balance economic and political vaccines will be arriving in the next few days. versus public health concerns, and In March, concerns began to arise about delays in measures implemented represent vaccine shipments leading to shortages. In this compromises between viewpoints. On context, President Alberto Fernández took to the the other hand, the government’s airwaves to get ahead of possible criticisms, and response to the second wave has been contextualize Argentina’s situation, noting that the vast majority of doses have been distributed to a conditioned by the experience of last handful of countries, and that there are global year’s extended lockdown, which production and logistical factors that have generated generated fatigue in the population a global delay in vaccine. He added that his and received sharp criticism from the government has worked hard to secure and distribute vaccines, and aims to ensure access for the opposition. entire population as soon as possible. Previously, in an effort to increase coverage and stretch limited Argentina’s early pandemic response resources, following consultations with experts and was characterized by coordination in coordination with local authorities, the national government announced that Argentina would be across party lines, but the opposition— prioritizing giving first doses to as many people as particularly more hardline elements possible and delaying administration of second doses without governing responsibilities— for three months. Its stated aim was to reduce has become increasingly critical of the mortality and hospitalizations related to a second wave. For its part, the opposition Juntos por el government’s response as overly Cambio coalition on April 14 issued a statement restrictive (or authoritarian) and criticizing the “enormous deficiencies” in the insensitive to the economy. Recently, vaccination campaign and calling for an explanation the opposition has focused its criticism on as to why the country does not have more vaccines. three main areas: the economic impact of lockdown measures, the right to

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education, and vaccine procurement. In and offering support for the city's decision response to the measures announced on to push for in-person classes.

April 7, the opposition

ARGENTINA

– coalition issued a statement saying, “It is Rodríguez Larreta and Fernández met particularly worrying to us that in the face early on April 16 to discuss the matter,

PCR PCR of the failure of the national government’s after which the president gave a press

public health strategy, that the repeated conference confirming that he would

response is insisting with excessive and not change his position on closing

poorly calibrated restrictions.” They called schools. In a press conference, the for defending the right to education, president explained that he had listened work and liberty. For this reason, the respectfully to the opposition leader and government has sought to portray the shares the belief that education should be a new measures implemented in Buenos priority, but argued that his decision Aires as “targeted” and “temporary”, prioritized epidemiological over educational seeking to distance itself from the criteria. The president highlighted an more widespread lockdown imposed a increase in cases among the youth year ago. It has also allowed commercial population in recent weeks, and added that businesses and gastronomic establishments the government’s overall goal is to decrease to remain open, but with more limited circulation in order to reduce contagion, hours. and that educational activity accounts for about one-third of mobility at this point. One of the most controversial issues Overall, the president articulated a has been the issue of in-person clear defense of the choice to close classes, which has been a point of schools as part of the government’s debate as the opposition has overall strategy in a moderate tone, repeatedly pushed the government to putting Rodríguez Larreta, who held open schools to differentiate itself his own press conference to respond from the government’s approach (see afterwards, back on the defensive. here for background). Although it had originally seemed that schools might be Regardless of the underlying policy exempted from the new restrictions, and disagreements, it is clear that the some government authorities such as electoral year is influencing the tone of Education Minister Nicolás Trotta had made the discussion around COVID-19 statements to this effect, President measures. For the opposition, it is Fernández’s April 14 announcement seeking to differentiate itself from the included a return to virtual classes for two government, as seen in recent weeks. Almost immediately, it began to statements criticizing the circulate that Buenos Aires City had moved government’s restrictions, and the to declare educational workers as essential, decision of many provinces to not thereby exempting them from the national adhere to the most-recent national restrictions. Subsequently, Mayor Horacio measures. The opposition has also Rodríguez Larreta announced that the city redoubled criticisms of the government’s would take legal action to prevent the vaccination campaign (see sidebar on suspension of classes. The mayor also previous page), arguing that it is moving criticized the president for the decision, too slowly and questioning its acquisition saying it was not made concurrently strategy, particularly why the government between the governments. The present was not able to secure the Pfizer vaccine. responded that he took responsibility for Some opposition officials additionally the decision, and that there were debates suggested that provinces and private health within his team. Subsequently, former providers should try and procure their own President Tweeted, calling vaccines, suggesting that this was the government’s “improvised and inept” something the

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national government had not allowed presidential bid (see here for (although there is no legal impediment to background). In his response to President

this, it is practically difficult). Fernández, the mayor doubled down on his

ARGENTINA

– oppositional stance, slamming the For Rodríguez Larreta personally, the government’s vaccination policy and saying

PCR PCR issue of education gives him a platform the city will fight to keep schools open. This

on which to clearly differentiate plays to the opposition’s base; after the

himself from the national government president's announcement, cacerolazos (a

as he positions himself for a possible form of protest that involves banging pots and pans) rang out in some neighborhoods Foreign debt negotiations ongoing with of Buenos Aires City and Province that are IMF, Paris Club as Argentina calls for opposition strongholds, and protests structural reform occurred the following night calling for in- person classes to be restored. Argentina’s negotiations to restructure its USD 44 billion debt with the International Monetary Fund (IMF) remain ongoing as the country also looks to For its part, the government is seeking renegotiate obligations with the Paris Club. to mitigate the public health crisis National Economy Minister Martín Guzmán while seeking to limit the political cost travelled to New York City and Washington D.C. in mid-March to meet with IMF officials to continue of a strict lockdown. Polls show that there ongoing debt restructuring talks. Comments made is general support for measures such as the by the Vice President Cristina Fernández de ones implemented this week, but there has Kirchner during Guzmán’s trip that Argentina been resistance from some sectors, such as cannot afford to pay and pushing for a longer repayment period generated some alarm, but the restaurants and bars. As such, the comments were in line with the government’s government is trying to portray the long-term stance. In any case, while a deal now restrictions as measured, necessary and seems unlikely to be reached before the midterms, limited to minimize reputational costs at the it appears that talks are advancing; following the meeting, the IMF issued a statement saying that same time that it seeks to ensure minimal “progress was made in defining some key economic damage, as it is counting on an principles that could underpin an economic economic recovery to strengthen its program” including recognizing that inflation is a position for the elections (see below). The multifaceted phenomenon that required macroeconomic policies and coordination efforts, government is also redoubling efforts to which Guzmán characterized as a “radical change”. ensure the vaccination plan continues to deploy and experiences minimal disruption Subsequently, Guzmán went on a tour through due to supply shortages. However, it is Europe (Germany, Italy, Spain and France) in early April to discuss Argentina’s debt with the IMF and worth noting that the implementation the Paris Club. Argentina has a USD 2.4 billion debt of the new measures once again payment due to the Paris Club in May, and is in exposed the government’s difficulties talks to postpone the payment for approximately a with coordinating a policy. This week’s year. Additionally, Argentina is seeking to ensure support from European governments for its IMF announcement was marked by mixed talks, and Guzmán also discussed the issue with messages from government officials, the Pope on April 14. and a delay in formalizing the restrictions after the president’s While Argentina continues to negotiate with the IMF, it has also renewed calls for structural change announcement, which led to confusion in the institution, particularly more support for about if the measures ultimately middle-income nationals and for debt restructuring implemented would be subject to processes. Argentina and Mexico have joined to change. call for a fund to support more orderly debt restructuring processes and greater access to IMF reserves known as special drawing rights for Debate continues about postponing middle-income nations as the COVID-19 crisis elections continues. This came amid discussion in the IMF about allocating USD 650 billion in special drawing rights to help boost countries’ reserves, a process There is ongoing discussion about Argentina said it supports and would see it receive postponing the national primary and approximately USD 4.35 billion. general legislative elections, currently

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set to occur on August 8 and October party (such as BA Mayor Horacio Rodríguez 24, respectively, due to the public Larreta) has expressed support for

health situation. Postponing the postponement, provincial governors from

ARGENTINA

– election could also buy the government the UCR party have expressed support for more time to showcase results in the suspending them. There are some outlier

PCR PCR economy and fight against COVID-19 positions in both coalitions as well; hardline

and better position itself in the PRO representatives (e.g., former President

election, in which it will seek to Macri, and party leader )

strengthen its position in the national have called for the elections to advance Congress (see here for background). without changes, while government ally However, the outlook for making these has suggested that the changes is uncertain due to procedural and primaries could occur simultaneously with time constraints, as well as lack of the general election. agreement within political blocs about the approach to be taken. There have been several meetings between the government and Time is running short to make the opposition leaders with respect to the changes, which require passing a law primaries. Following a meeting in early through Congress with an absolute April, it circulated that an agreement had majority. Although there is no firm been reached to postpone the elections, deadline for when this law would have to be which created discomfort in the opposition passed, there is a perception that it should and exacerbated tensions with the be done by May 10 (the deadline set by the government and within the opposition. National Electoral Chamber for officializing Shortly thereafter, the opposition met to the call for primary elections). In any case, define a posture on the matter, but failed to elections will have to be held so that new do so. Instead, it issued a statement legislators can assume their seats on stating that they had not received a December 10, as legally established. concrete proposal from the government, and left open the Changes to the midterm electoral possibility of supporting postponing calendar have also stalled due to primary elections, but not suspending divergent opinions within both of the or unifying them with the general main political blocs as to approach and elections. the fact that, until recently, neither the government nor opposition has Outlook articulated a clear and concrete proposal around which agreement At this point, the alternative that could coalesce. Within the governing seems most likely to gain support and coalition, the two main advance is a postponement of the positions are that the primaries should be elections, although it is far from postponed or cancelled. In December 2020, assured that the electoral calendar will part of the coalition (largely governors) be changed. In mid-April, the government presented a bill for a one-time suspension released a draft of a bill that proposes of the primaries to reduce health risks and setting September 12 as the date for the expenditure, but other coalition members primaries and November 14 for the general including Governor elections (from August 8 and October 24, and National Deputy and leader currently), which was discussed in a of Kirchnerist group La Cámpora, Máximo meeting between the Interior Minister and Kirchner, want to compete in primaries and heads of parties from opposition coalition in have called for them instead to be lower house. postponed. The opposition Juntos por el Cambio coalition similarly has divergent However, Juntos por el Cambio has not internal positions; while much of the PRO reached consensus on its position on

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the issue. While more moderate elements due to the current context. It is now such as the UCR and CC are supportive of a awaiting consideration in the lower house.

delay, more hardline elements of the PRO

ARGENTINA

– party have said their support may be It is still too early to begin to make conditioned on guarantees that this will be predictions about the outcome of the

PCR PCR a one-time occurrence and other possible election given the uncertainty around

changes to the voting system, such as the how the COVID-19 situation and

using a single ballot, or the restoration of economy will develop in the coming

voting rights for Argentines abroad. Earlier months. However, as analyzed before (see this year, the government had removed the here for background), the government has possibility for Argentines abroad to vote by less to lose in this election than the mail as permitted by the previous opposition, which must defend its strong administration in 2019, instead requiring performance in the 2017 legislative them to vote in person at an Embassy or elections. Additionally, although the Consulate; votes abroad broke president’s approval rating is at its lowest overwhelmingly in favor of the opposition in point since taking office (see graph), he the last election. maintains a solid base of support of around 30-40 percent. There is likely some The uptick of cases in recent days may space to increase support if the support efforts to postpone the economy continues to show positive primaries. There is some precedent for signs of growth, and the vaccination modifying the electoral rules in light of plan advances. Polls show that voters the current situation. In March, the whose at-risk family members have Senate unanimously approved a bill that been vaccinated are more likely to suspends the expiration of political parties approve of the president’s that have not held internal elections or do management. In this sense, pushing not have the minimum number of members back the primaries may play to the government’s advantage by giving

Sources: Average of polls by D'Alessio IROL-Berensztein; Giacobbe & Asociados; Synopsis Consultores; Isonomia; Management & Fit; Zuban, Córdoba & Asociados; Directorio Legislativo; UdeSA; Move.

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time to vaccinate more people, are also building their own electoral although it is far from certain that the structures.

government will be able to maintain a

ARGENTINA

– steady pace of vaccination. Congress opens with hybrid sessions and an economic-driven agenda

PCR PCR Meanwhile, Frente de Todos is working

hard to maintain its coalition united in Following President Alberto

the elections despite internal frictions, Fernández’s inauguration of a new

cognizant that a unified will period of ordinary sessions in the be difficult to defeat. While Alberto national Congress on March 1 (see last Fernández was voted national head of the PCR for background), Congress has Peronist Party with support from governors, begun the legislative year with an unions and Kirchnerist group, Máximo agenda largely focused on economic Kirchner was chosen to head the party in measures. After meeting with the the key battleground of Buenos Aires president to discuss the legislative agenda Province. This represented a concession to for 2021, the president of the Chamber of the Kirchnerist part of the coalition, and Deputies, Sergio Massa, confirmed that required internal politicking to ensure the Congress’ agenda will focus on bills that support of Peronist mayors in the Buenos provide an electoral boost to the Aires metropolitan area, many of whom government. would have preferred to be represented by another leader. Both chambers have been working remotely or under mixed-protocols On the other hand, Juntos por el since last year, and the first hurdle to Cambio has yet to clearly define overcome was extending the political leadership and continues to evidence agreement to allow sessions to be struggles between its different held. While the Senate (where the factions for predominance in guiding government has a majority) quickly the coalition’s approach. In mid-March, approved an extension of remote sessions, former President Mauricio Macri generated the Chamber of Deputies struggled to political noise with the launch of a book renew its protocol. In the lower house, the reflecting on his term in office called “First governing Frente de Todos does not have a Half”—a sports metaphor suggesting a majority, and negotiations were required to possible second term is under achieve the number of signatures needed to consideration. His appearances included the approve a hybrid protocol through April. declaration that the opposition would return The agreement was passed without the to the presidency in 2023, and has been support of Juntos por el Cambio, who said marked by a very ideological, and they will not support a mixed system if oppositional discourse. This approach has issues such as the judicial reform and the been predominant in many of the reform of the Public Prosecutor's Office law coalition’s recent communications, but remain on the agenda. masks differing approaches between those who support more hardline During March, both chambers have opposition or offering a more moderate been actively working on key bills as alternative to the government. For well as renewing chambers and example, Macri’s former VP pick, Peronist committee’s authorities. The top Miguel Angel Pichetto, is working with some priority on the congressional agenda moderate members of the opposition to was an income tax bill reform proposed build a non-Kirchnerist Peronist alternative by Deputies Chamber President, Sergio within Juntos por el Cambio with the aim of Massa, so as to reduce the universe of getting votes in Buenos Aires province, workers that pay income tax. In where other internal lines of the coalition

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tandem, Congress discussed and approved the Income Tax Transition Bill for

Independent Workers which updated the International affairs: despite tensions, ARGENTINA

Argentina remains pragmatic in approach

– tax framework for independent workers and moved towards a unified regime. Lima Group: In late March, Argentina announced its

PCR PCR withdrawal from the Lima Group (formed by countries The income tax reform bill, which interested in restoring in ).

increased the threshold for paying Argentina said that participation of part of the

personal income tax, received broad Venezuelan opposition in the group led it to adopt measures Argentina could not support. Argentina’s political support and quickly passed government said it prefers “inclusive dialogue” to allow through both chambers. While presented elections and its supporters characterized the group as by the governing party, the final version “interventionist”. The decision to leave was highly included some modifications proposed by criticized by the opposition, which promoted participation in the Lima Group under former President Mauricio the opposition parties as well as unions. Macri. Many deputies and senators considered it to be a timely measure that could offer relief US-Argentina relations: The timing of the Lima Group to workers in the context of the COVID-19 announcement generated concerns about potential crisis and help restart consumption. In an impacts in Argentina’s foreign relations, especially with electoral year, both the ruling party as the United States. However, despite the move and concerns that Argentina is getting closer to Russia and well as the opposition need to advance China, signals suggest that Argentina is maintaining a policies and regulations that pull them pragmatic relationship with the U.S. As anticipated by closer to their electorate. The bill will Argentina’s ambassador to the U.S., the change of benefit more than a million workers who will administration in the U.S. has generated more interest in engagement from both sides. In late March, President stop paying income tax, and others who will Joe Biden invited President Fernández to participate in a see their rates reduced. Therefore, climate change summit, and subsequently sent a advancing this law helps position both personal note to Fernández wishing him a swift recovery parties favorably among voters. from COVID-19. At the same time, in recent weeks, several high-level U.S. officials visited Argentina—such as the head of the U.S. Southern Command, Admiral Also on the congressional agenda is an Craig Faller, Biden’s top advisor on Latin America affairs, extension (or replacement) of the Juan González, and the top regional State Department current biofuels law, which requires official, Julie Chung—with agendas focused on climate change, COVID-19 solutions, democracy and human blend mandates for ethanol and rights. biodiesel and offers tax incentives and is set to expire on May 12. This has not Mercosur: In late March, and in its capacity as interim advanced due to lack of political president of the bloc, Argentina organized a virtual consensus about the approach summit among Mercosur member countries’ presidents between the government and to commemorate the 30th anniversary of its founding. The meeting was characterized by tense exchanges on opposition. Last year, the Senate the revision of bloc trade agreements and common unanimously approved an extension of the external tariffs. During the meeting, Brazil, Uruguay and current promotion regime, and the bill was Paraguay requested more flexible norms to negotiate set to be discussed in the lower house the trade agreements with third parties without authorization of the other partners, as well as revising second week of March but its treatment has the common external tariff. While President Alberto been delayed as several alternatives have Fernández said he does not share the rest of the bloc’s arisen. Some parts of the industry were views on these issues, Argentina plans to present a pushing for a law that would increase the proposal which includes the reduction to zero of almost 2,000 tariff positions that make up to 20 percent of the blend requirements, while the head of the total nomenclature of goods and services. Argentina’s government bloc in the lower house, proposal would exclude key industrial sectors, while Máximo Kirchner, has proposed excluding other members of the bloc have been pushing for deeper large companies from the regime and and broader changes. A new virtual meeting is expected to take place at the end of April. reducing the minimum percentages of biodiesel and ethanol. A special session

called by the opposition to discuss the extension in the Chamber of Deputies failed

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as the opposition itself failed to reach with a bill that proposes to decrease income quorum. The bill has been stalled since. tax rates on 90 percent of companies with

the aim of benefitting SMEs. The executive

ARGENTINA

– Among other activities, the Senate—as sent the bill to Congress last week. The part of its formal duties—has approved Chamber of Deputies is also expected to

PCR PCR the nominations of judges, prosecutors discuss the Fiscal Consensus agreed with

and federal attorneys sent by the most provinces last year (and already

presidency, and approved several approved in the Senate) which would allow

other bills (including one that allows them to increase taxes in exchange for not parties to maintain their legal status this taking legal action against the national year even if they have not held internal government in relation to shared funds elections or do not have the minimum known as coparticipation. number of members, and one that modifies the Criminal Statute on prevention and punishment for sexual harassment in public spaces). In the Chamber of Deputies, committees have been holding informational sessions on a nutritional labelling bill, and approved an Environmental Education Bill (sent to the Senate). It will also have to discuss modifications to the bill on on prevention and punishment for sexual harassment in public spaces.

Notably absent from the congressional agenda has been judicial reform, which the president said would be a priority. Former national deputy from Río Negro Martín Soria was named the new Minister of Justice and Human Rights following the resignation of Marcela Losardo (see here for background). Soria, who has previously criticized what he called politicized behavior of the judiciary in several high-profile cases, stated that his priority would be to advance bills proposed by President Fernández. However, in the current political and electoral climate, with the government facing challenges on many fronts, the bill is likely too controversial to advance.

Moving forward, several additional economic bills will be on the congressional agenda. First, the government has decided to move forward

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