FpV holdouts split greater than expected Pichetto leads 26 senators to support government, talk of fracture in caucus dismissed

Friday, April 1, 2016

FpV holdouts split greater than expected

Pichetto leads 26 senators to support government, talk of fracture in caucus dismissed

The Victory Front (FpV) caucus in the Senate emerged divided from the holdouts vote yesterday, with no less than 26 contributing to the 54-16 vote in support of the government’s bill, including caucus chair Senator Miguel Angel Pichetto (Río Negro).

Every single one of the negative votes (16) came from the rest of the FpV, exemplifying the split within the caucus. The majority of the FpV’s votes in favour of the bills came from northern provinces with Chaco and La Rioja the primary exceptions. Proyecto Sur Senator Fernando “Pino” Solanas (Buenos Aires City) was absent at the time of voting but he was strongly against the measure. As part of the multibillion-dollar deal established with holdout creditors at the end of February, April 14 is the deadline for the country to honour its agreements.

The bill repeals articles of the Padlock Law and the Sovereign Payment Law and authorizes the government to issue US$12.5 billion in bonds in order to pay its creditors.

Pichetto had already announced that the FpV had a free vote but in his closing remarks before the vote made it clear that there was a sharp difference of opinions within the caucus.

“For the first time, I am going to speak on behalf of a group of senators in my caucus. Our caucus today is going to vote, recognizing individual freedoms, according to respectable positions that each senator has expressed during this long day and have settled on this issue. I am going to vote in favour, as I said before. I consider that it is fundamental to resolve this pending matter quickly and intelligently, contributing with the country in mind,” Pichetto said, underlining that the vote was going to mark a departure from the usual unity within the caucus.

Many of the FpV senators that voted against the bill cited recent United Nations guidelines over the handling of sovereign debt restructurings, but Pichetto played down their importance. “The United Nations principles are very good because they speak of equal treatment, of the principle of equity, of proportionality, of a whole other series of questions that we share. However, they don’t speak about how we resolve a judicial matter that has a firm sentence, that has pre and post sentence punitive charges.”

Yesterday, Pichetto denied that there would be a formal split within the caucus on the matter. Speaking to Radio Mitre, the senator for Río Negro said every effort would be made to maintain unity and that there would be matters in the future that the caucus would disagree on.

FpV Senator Teresita Luna (La Rioja) voted against the bill, but said a rift in the caucus would be the worst outcome. Luna however would not be drawn on Pichetto’s address in the floor.

Senador Maria Ester Labado (Santa Cruz) repeated once again yesterday that governors had “blackmailed” senators inti supporting the bill, and once again asked public works in her province be reactivated.

In the Lower House, the FpV voted almost unanimously against the bill.

Government pleased

In turn, government officials hailed the approval of the holdouts bill as a necessary step toward regaining access to international credit markets and to put the country on the path of economic growth. Finance Minister Alfonso Prat-Gay, present in the Senate as it approved the plan his ministry hatched to settle the holdout affair, said yesterday that “nobody enjoys paying the professionals of usury, but we had to do this to begin to grow, that is the logic, we are not going to indebt ourselves because this debt was already on the books and for nearly the same amount that we are going to end up paying, about US$11.5 billion. There isn’t an increase in the debt, rather a change of creditor.”

Acting President Gabriela Michetti said that “the debt was like a Sword of Damocles hanging over Argentina. If we don’t settle this issue, the problem with the restructured debt is that it suddenly collapse and that suits begin, there is a gigantic risk. The opposition understood that responsibility that we have and decided to lend its support.” Michetti enacted the legislation yesterday only hours after the Senate gave its approval.

Herald staff with DyN