Argentina's Macri to enact IMF-imposed cuts by decree, circumventing Congress
Amid a deepening recession and foreign debt crisis, Argentine President Mauricio Macri has, according to documents leaked from the Economy Ministry, committed to budget cuts of nearly $10 billion.
The cuts - around 8% of next year's proyected federal budget - had first been unofficially reported on June 8, the day Macri signed an agreement with the IMF for a $50 billion stand-by credit line.
The IMF-backed program has since been enacted solely by decree, starting with federal payroll cuts of around $1 billion - which led to the military's refusal to participate in the Independence Day parade.
But according to documents obtained by the progressive online daily El Destape, a full third of the cuts will be in federal public works spending, which the Economy Ministry pledged to cut by $3.3 billion - a whopping 81% in real terms.
Other federal cuts - including a freeze on AUH benefits for poor children (amid 40% inflation) - will make up another third.
Economy Minister Nicolás Dujovne also suggested today that 3.5 million "non-contributory" pensions (around half the total) could be eliminated outright. If enacted, this would double budget cuts to $20 billion - but would affect the poorest seniors.
A new federalism
The remaining one third will result from reduced transfers to the nation's 23 provinces.
These revenue sharing cuts include shifting $1.7 billion in pensions and $1 billion in social assistance costs to already cash-strapped provinces, as well as cuts of up to 50% in transport, education, housing, and health subsidies - including vaccines.
Provinces will lose another $1.1 billion by the rescission of the Federal Solidarity Fund (FFS), which though only 1% of their combined budgets, was a boon to municipalities (particularly smaller ones) as they automatically received 30%.
Like the payroll cuts in July, the FFS was eliminated yesterday by decree - a day after an IMF delegation arrived in Buenos Aires to monitor the June 8 agreement.
The agreement has prompted protests from opposition parties.
They note that besides overriding Congress' budgetary authority, the terms do little to curb a record $31 billion current account deficit (nearly 5% of GDP).
Current account deficits doubled after Macri - with IMF support - liberalized imports and finance, leading to record trade deficits and capital flight.
The nation's public debt has ballooned under Macri from $223 billion (38% of GDP) to $368 billion (87% of GDP), leading Bloomberg on Monday to position Argentina as the second-most vulnerable to default among emerging economies.
The Argentine economy, which grew 2.9% last year, has meanwhile fallen 5.8% just as of May.
This would be the 2nd recession since Macri took office.
At: https://translate.google.com/translate?sl=auto&tl=en&js=y&prev=_t&hl=en&ie=UTF-8&u=https%3A%2F%2Fwww.eldestapeweb.com%2Fexclusivo-los-documentos-que-firmo-el-gobierno-el-fmi-ajustar-294-mil-millones-bajan-jubilaciones-y-auh-n47742&edit-text=
Fourteen of the nation's 23 governors gather in Buenos Aires to discuss Macri decrees cutting revenue sharing programs - a key point given that over 40% of provincial budgets are federally funded.
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This really reminds one of the Jenga game I've seen in TV commercials, consisting of a lot of little pegs which are removed by the players:
He's been depleting, vaporizing the people's tax contributions to the government from his first day in office.
Each report brings more news of a shrinking fund for the country, headed for the likelihood all that will be left is partial payment of the military, and the meagerist staffs for government offices, and, of course, lots of ammunition and jail cells reserved for when the people start protesting in deepest desperation.
Can't imagine why any of these governors are smiling,except for the blond woman wearing jeans. Maybe they're drunk, or have been given a powerful drug in their food!
This report stuns a casual reader. Can't begin to imagine how reading this would affect someone who has to live with Macri's decisions. It appears this is going to be happening everywhere there's a sociopathic person who has wormed his/her way into the top position.
Thanks for the latest information on Macri's war upon the country, except for those who probably have wealthy safely offshore, and multiple homes out of the country, anyway. They must all really be laughing up their sleeves together.
