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G.BREUER DESDE 1869 |
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G. BREUER's Newsletter February 2008 |
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Dear Clients & Friends, We are sending to you the monthly edition of our Newsletter where you will find an update on: Please do not hesitate to contact partners Jorge Otamendi (joo@gbreuer.com.ar) and Alberto Navarro (anavarro@gbreuer.com.ar) for any specific question you may have after reading it or for any other issue you may need advise on. Best regards,
G. BREUER 25 de Mayo 460 Buenos Aires - Argentina Tel: +54 114313 8100 Fax: +54-11-4313-8180
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At national level, there are no a lot of important political news this month. The President, Ms. Kirchner, had several meetings with important business people and with union representatives but none of them were very relevant or produced news worth reporting. It is important to note, though, that as the result of the meetings held with union leaders, there was an increase of certain social security payments. That was seen as a “gesture” to the leaders so that they are reasonable with their demands for salary increases. Such increases are expected to come because of the actual numbers of the inflation, which are far higher than the unrealistic reports provided by the official statistics office (INDEC). Probably the most relevant political news of the month are linked with the “reorganization” of the Partido Justicialista or Peronist Party, the powerful political party founded by Juan Perón half a century ago, carried out by no other than former President Kirchner. With the discredit and the breaking up suffered by the Radical Party on 2001 caused by the country economic-social and financial crisis, the Peronist Party became an almost hegemonic political structure in Argentina, and despite the fact that it always seem to be disintegrating and that the ideologies of their members are very varied –from conservatives to socialists-, it is a political structure without the support of which no government can be guaranteed success in Argentina. Many are saying that the reorganization of the Peronist Party is a means for former President Kirchner to keep the control on the political power in Argentina despite his having left the presidency in the hands of his wife. And the new reorganization, in practice, means that all former and actual members of the party are called to express opinions and propose measures for the appointment of new party authorities. It is said that President Kirchner is seeking to be appointed president of the party by “consensus”, i.e. without elections. In this regard, Mr. Kirchner met with his former finance minister Roberto Lavagna, who run for the presidency last October against Mr. Kirchner’s wife and gathered a significant amount of voters, mainly opponent of Ms. Kirchner. Both of Mr. Kircher and Mr. Lavagna agreed that the latter would return to the Peronist party. Most of Mr. Lavagna’s voters in the last election are questioning very much his meeting with Mr. Kirchner and are seeing that his stance as opponent may have been a strategy to deprive votes to the real opposition. Mr. Lavagna denies those allegations. What it is clear now is that the Presidential couple, clearly in control of the Peronist Party now, will have plenty of power to consolidate their hold of the political decisions in Argentina. And on the opposition front, President Kirchner’s move to consolidate the Peronist Party may produce also consolidations and definitions. So far, the Civil Coalition –Elisa Carrió’s party- and the young party of the major of the City of Buenos Aires, Mauricio Macri, seem to be the only significant forces to be not co-opted by the Peronists. The Radical Party, traditional opposition party, is undergoing a deep crisis which may result in an even deeper decrease of its political presence. It would be very good news for Argentina if the reorganization process that we have been describing ends up producing stronger political organizations at the expense of stronger political figures. “Personalims” are to blame in many cases for the lack of institutional quality that has damaged –is currently damaging?- Argentina’s democratic institutions so much. The current administration reported a 8.5% inflation for 2007. However, employees at Argentina’s national statistics agency (INDEC) unveiled their own unofficial inflation data and reported a rate of between 22.3 and 26.2%. Most of the objective sources agree with the “unofficial” rate. Supermarket sales grew suspiciously 29% during 2007, which may provide evidence that in fact sales only grew a little and what definitely grew at a higher rate were prices. Fears of recession in the United States have sent international financial markets tumbling. However, according to the economic minister, Martín Lousteau, Argentina is well placed to deal with global turbulence due to tighter banking system regulations and because demand for its key farm exports is estimated to remain strong. Furthermore, some economist says that other reasons are its lower debt level, the competitive exchange rate and its fiscal surplus. It is worth mentioning that the construction industry expanded 6% in 2007, its slower annual growth rate for five years. In December 2007, industry output grew 11% from the same moth a year earlier, but retreated 0.3% from November. Analysts expect a continued slow-down in the construction industry, which has recovered rapidly from a financial crisis that peaked in 2002. Finally, it is also worth noting that Spanish grain traders estimate that the European Union will soon permit import of a variety of genetically modified maize (GA21) that would allow supplies from Argentina to ease sky-high prices. Estimations from the agro-industrial sector state that Argentine corn exports could reach 16 million tons in the 2007-2008 season, higher than the US exports, which is, until now, the first exporter of the world. You may read the February edition of our Boletín Informativo, G. BREUER’s monthly publication focused on general legal information sent to our Argentine clients & friends. |
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- For more information on local legislation, you may read the February edition of our Boletín Informativo sent to our Argentine clients & friends. |
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G. BREUER 25 de Mayo 460 Buenos Aires - Argentina Tel: +54 11 4313-8100 Fax: +54 11 4313-8180
Please note that the information given in this bulletin is for general purposes only and does not intend to provide comprehensive legal advice on any issue. If you do not want to receive this bulletin, or if you think someone else in your organization should be receiving it, please reply to this link.
© G. BREUER, 2008 |
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