Tuesday, March 8, 2016

Macri’s holdouts bill wins key support

Justicialist caucus leader Diego Bossio is one of the key opposition leaders negotiating with President Mauricio Macri’s government.

Massa declares he will back legislation but seeks to renegotiate fine print of deal

President Mauricio Macri is edging closer to winning the vital congressional support he needs to settle the conflict with holdout bondholders in New York courts, after key opposition leaders including Renewal Front chief Sergio Massa said yesterday they were willing to back the government’s initiative.

The Executive’s bill to repeal the Padlock and Sovereign Payment laws — which District Judge Thomas Griesa has demanded must happen in order for him to lift the injunction against Argentina — could undergo some changes before it reaches the Lower House, but representatives for the PRO party said yesterday they were open to discussing alterations.

“We are going to back the repealing of the laws because Argentina has no option but to put an end to its default and return to (international) markets,” Massa said, though he added that there had to be “intelligent limits” set on the final deal.

Renewal Front economists, led by lawmaker Marco Lavagna, have been holding meetings with the government to negotiate a definitive proposal. According to Massa, his caucus will present a different option before the committees debating the bill, calling for part of the debt that the government will issue after the settlement is reached to be spent on infrastructure projects instead of general expenses.

The chair of the Lower House’s Budget Committee, PRO’s Luciano Laspina, said yesterday they were open to making some changes to the bill’s original draft.

“Having no access to credit markets has stopped investment. Without investment, people lack jobs. The Padlock Law and the Sovereign Payment Law are a clamp on external financing for the country, provinces and companies. We will propose changes to make the transition as good as possible, avoid future headaches and not make the same old mistakes,” Massa added.

Late last night, the Renewal Front leader and Macri’s economists were reportedly meeting in Tigre to discuss the fine print of the agreeement.

FpV divided

The leader of the Victory Front (FpV) caucus Héctor Recalde reiterated yesterday that he would oppose the move, saying his caucus will not help Let’s Change achieve the necessary quorum to debate the laws because “we don’t agree with the way the negotiations were done in a hurry.” He said the agreement with the so-called “vultures” was “damaging for the country.” He was also unhappy at the timeframe that Griesa “imposed” on the country to repeal the laws.

But Recalde could not ensure that a group of lawmakers inside the FpV caucus would fold off and play their own game, helping Macri achieve quorum.

The FpV lawmakers that could help Macri repeal the laws are those with close ties to governors, who are currently negotiating financial help from the national government.

Among them are those with ties to FpV’s Entre Ríos governor Gustavo Bordet, who said yesterday that “quorum has to be achieved” to ensure that “the debate takes place.” Eventually, Bordet argued, if something doesn’t look convincing then there’s time to vote “no.”

Bordet said “international credit is important for the provinces” and that “the viability of provincial and municipal governments” is at stake.

Lawmakers from San Juan, Misiones, Tierra del Fuego and Tucumán are also being targeted by Let’s Change as plausible allies.

Not all the provinces are willing to negotiate, however, with Chaco’s Justicialist Party saying yesterday that its representatives should vote against the deal. Chaco enjoyed one of the best national-provincial relationships during Cristina Fernández de Kirchner’s administration.

Other caucuses

The FpV caucus had already seen a splinter group form earlier this year, when former ANSES social security chief Diego Bossio and a series of provincial lawmakers formed their own Justicialist Bloc, which wants more independence from the former president and a closer relationship with Macri.

Bossio’s caucus is negotiating some changes to the bill repealing the laws in the same way as Massa, but the lawmaker had a more confrontational tone yesterday.

The former ANSES’ chief said that “we can’t start an uncontrolled process of debt issuing, we think the Congress cannot cede its right to authorize new debt to the Executive Branch.”

His caucus’ chief Oscar Romero, however, said their lawmakers would be present for the quorum. “We have said from the beginning we have no will to be obstructionist. We will grant the quórum in every debate. We have been elected to work and that’s what we are going to do.” He also added that the conflict with the “vultures” was had to be closed “once and for all.”

Let’s Change’s 89 lawmakers mean that they need 30 allies to achieve 129 needed for the quorum, making Massa and Bossio’s caucuses key.

According to Laspina, the Progressive caucus’ lawmakers will be on the floor to ensure the debate starts too.

He said the differences with other parties was now focused on technical issues, but that he was also looking to “improve the bill’s political support.”

Senate next

The bill is likely to reach the floor late this week. If it passes, it will then be up for debate in the Senate, where the situation is similar, with Let’s Change needing help from opposition lawmakers to ensure the bill passes.

In the Senate, however, Massa’s influence is smaller, while the governors’ leverage increases.

FpV’s approach also looks set to be different, with Recalde yesterday blasting his fellow partymember Senator Juan Manuel Abal Medina for the latter’s suggestion about helping Let’s Change with the quórum.

“I thank him for the advise, but I’m not going to take it,” Recalde said yesterday.