After writing off $1.2 billion electric utility debt, Argentina's Macri blames A/C use for crisis

[tenorly]

Speaking at an official Energy Ministry event on Thursday, Argentine President Mauricio Macri called air conditioning "part of that explosive and sinister cocktail invented by the previous administration."

The statement, part of a speech in which he chided his fellow countrymen for what he considered to be excessive energy use, referred to the policy maintained by his predecessor, former President Cristina Fernández de Kirchner, of providing generous energy subsidies to residential, commercial, and industrial consumers.

Energy subsidies, both direct and indirect, reached $17.5 billion in 2015 according to the IMF. Such subsidies reached 10.5% of the federal budget that year, though in relation to GDP (2.8%) remained modest compared to energy subsidies in neighboring Chile (3.3%), the U.S. (3.8% of GDP), India (12.3%), or China (20.1%).

Rate hikes and debt write-offs

Despite repeated campaign promises to the contrary, Macri announced massive utility rate hikes shortly taking office a year ago. These hikes have averaged 400% more for water, electricity, and gas - as well as gasoline and public transport fare increases of 100%.

Touted as a way to trim $4 billion from the nation's budget deficit of $24 billion last year (3.9% of GDP) these hikes - known in Argentina as tarifazos - were imposed in April as part of a broader, IMF-endorsed austerity package implemented within days of taking office.

The Macri administration, on the other hand, used its decree powers on November 14 to write off some $1.2 billion in debts owed by the nation's electric utilities to the federal electricity distributor CAMMESA.

The write-off was itself necessitated by sharp losses at the nation's electric utilities since the hikes took effect because while their receipts have doubled, power generation costs skyrocketed by way of sharply higher natural gas prices. This led to a collapse in net income for electric utilities from a $75 million profit in the first quarter of 2016 to a loss of $150 million in the second.

Critics point out moreover that because the rate hikes also affect schools, hospitals, and many other public institutions, net fiscal savings would be at most $1 billion - a figure dwarfed by the $10 billion in tax cuts Macri enacted for agro-exporters, the mining sector, and on imported luxury goods.

The effect of these and other trickle-down tax cuts, combined with the sharpest recession since 2002, have pushed Argentina's federal budget deficit up by two-thirds in peso terms through October.

Macri made the nation's rising budget deficit was key campaign theme in 2015 elections, which he narrowly won. Inflation has likewise risen from 24% to 45% as of November - the highest reading since January 1992.

Air conditioning in the winter

A poll conducted by the University of Buenos Aires School of Social Sciences showed that 77% of Argentines have had to make "significant adjustments" in their household budgets to afford these rate hikes. Partly as a result, retail sales were down 8.5% in November from the same time last year.

The administration and its surrogates nevertheless often chastise the public for what they see as wasteful household habits.

Macri himself has described his fellow countrymen as given to "walking around in their underclothes in winter" and "setting the thermostat at 65° in the summer, when 75° should be comfortable enough." First Lady Juliana Awada herself admitted in a 2015 interview that the couple "enjoy turning the air conditioning on even in winter - so much so we have to sleep stuck to each other."

"She's like that," Macri explained at the time. "She likes me close."

At: http://www.diarioregistrado.com/politica/macri-acuso-a-cristina-de-haber-permitido-que-la-gente-compre-aires-acondicionados_a58530fcdcc4faf9272f0915a

And: http://www.diarioregistrado.com/politica/el-gobierno-de-macri-le-perdono-a-las-electricas-una-deuda-de---19-000-millones_a582a0a9e0c297bac2b68c2ce

[Judi Lynn]

1. This clown is trying to justify his hideous management by blaming the poor,

who will be footing the bills he is incurring on their behalf.

They are the ones who will be screwed mercilessly by cost increases for energy, and those who DO possibly abuse the system do have the money to handle the higher costs.

Only the poor suffer, as always.

Macri is a monster, just as he was one year ago, when he got lucky and slimed his way into the Presidency through chicanery, lies, and downright dirty deeds.

Remember Richard Nixon and his fondness in the summer for firing up the A/C to the max, then opening up the fireplace for a good old roaring fire.

Poor people can't and don't afford this, and they are the ones who get screwed for the intemperance of others.

If only people would wake the #### up and impeach Macri now they would be saving the honest, hardworking people of Argentina a lot of grief.

[tenorly]

2. Even right-wing apologists like 'The Economist' are fed up with him.

Macri, as seen by Economist cartoonist Peter Schrank (who's no leftie!).



Loved the Nixon imagery, btw. Didn't know that about him - now that you mention it though, I bet he did that just to annoy Pat (poor thing).