MercoPress. South Atlantic News Agency

Countdown for Kirchners special powers: August 24

Nine billion US dollars of revenues are at stake

A “D” day has emerged in Argentina’s congressional calendar which helps to explain some of the latest dialogue overtures by the administration of President Cristina Fernandez de Kirchner, according to a columnist from Buenos Aires daily La Nacion.

On August 24, the Kirchner’s administration special powers to impose taxes based on complicated emergency legislation which transfers some powers (such as imposing new taxes) from Congress to the Executive expires.

Either Mrs. Kirchner renews those special powers, which is hard to see because of the trashing suffered at the mid term elections and nobody knows how many members of Congress will support such an initiative or she faces the prospect of a huge loss of revenue (export taxes on grains, oil seeds and hydrocarbons are equivalent to 9 billion US dollars), which the non extension of those special powers represent.

Therefore the Kirchners will necessarily have to sit and dialogue with the opposition including the growing dissidents from the ruling Justicialista party and camp representatives, something which they had been refusing point blank until last June 29th.

Since the Kirchners became a formidable force with a strong grip on the party and Congress, legislation granting the Executive special powers, including the creation of taxes, was passed with no major inconveniences.

No longer, even when the new Congress won’t be sworn in until December, many of the defeated Deputies and Senators have learnt the lessons of the futile battle of combating farmers and the related industries.

Actually the Kirchners insistence on over-taxing soy and grains landslide earnings carved the way for what was considered an impossible: a united front of farmers. In Argentina (and in the rest of the world) small, medium and big farmers, as well as land owners and those who lease land to work it don’t usually sit at the same table or see things the same way.

Apparently the political dialogue overture then is geared to avoid the possible confrontation in Congress and defeat of either side: the administration or a divided opposition.

The messages are clear: the head of the Kirchner Congressional grouping Agustin Rossi has publicly asked the government to sit and dialogue with farmers specifically on taxes, and just in case made it clear that “agriculture policy is the responsibility and domain of the Agriculture Ministry (not of Congress)”.

However the Kirchners still have a bargaining chip: supposedly 30% of those 9 billion US dollars in export taxes on agriculture commodities and hydrocarbons are shared with provincial governors, who also have serious budget shortages.

But outgoing members of Congress are desperate to reconcile with farmers and provincial town folks who live from camp activity and have suffered greatly under the obstinacy of the Kirchners.

So according to the La Nacion article a big countdown to August 24, is awaiting the Argentine political system. Will legislators wipe out export taxes or go further and eliminate all of the Executive’s special powers granted by previous submissive Congresses?

In former president Nestor Kirchner’s thinking, will the “conservative restoration” represented by farmers and their allies reinstate their dominance?