Gov't 'optimistic' Congress will lift Padlock Law

Cabinet Chief Marcos Peña talks to reporters outside the Pink House.

There is optimism among government officials that the Congress will lift the Padlock Law (Ley Cerrojo) clearing the way for Argentina’s long-standing dispute against so called “vulture” funds to be settled, Cabinet Chief Marcos Peña said.

“We are optimistic that Congress will revoke the Padlock Law,” Peña said today adding the country’s representatives will be resuming negotiations in the “upcoming days,” now with a signal of apparent support from US Judge Thomas Griesa who on Friday said he would vacate the injunctions against the country only if Congress lifts the Padlock Law (Ley Cerrojo) and the Sovereign Payment Law.

“We will initiate negotiations in the upcoming days but it is something we have been discussing for a while,” the head of ministers affirmed in statements to the Mitre radio station, considering Griesa’s message “a good step to unlock the situation.”

“We have to take the drama out, this is not a heroic deed but something we have to resolve. And in Congress there is understanding that it has to be resolved, so in the upcoming days we will initiate negotiations, but we have been discussing it for a while.”

Inflation and income tax

Queried about inflation that has been hitting on Argentienans’ pockets over the past months, Peña said the government “is in the way to eliminate” it.

“(Inflation) is profoundly unfair, especially for those who have less. We are in way to eliminate inflation, but it will take time, about two or three years.”

“The first month we have to stop the inertia the Kirchnerite government left but we don’t want to take the way of shock or a big adjustment, we know how that happened in Argentina’s history. We have to order an economic disaster, deficit, lack of competitiveness and transparency,” Marcos Peña pointed out as he also analyzed this week’s announcement by President Mauricio Macri increasing the income tax floor.

“It is a very big fiscal effort; it is a very important step. Brackets can be discussed during the year in Congress but we expect leaders’ understanding,” he said.

“We have to protect the fragile health of the economy so that we don’t have a collapse, a breakdown or a negative adjustment for the entire group. We received one of the worst fiscal deficits in the history (of the country).”