G.BREUER
DESDE 1869
G. BREUER's Newsletter
November 2006
Dear Clients & Friends,
We are sending to you the monthly edition of our Newsletter, where you will find an update on:
Hoping that you find this issue as interesting as our previous ones, please do not hesitate to contact 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.
Sincerely,
G. BREUER
25 de Mayo 460
Buenos Aires - Argentina
Tel: +54 114313 8100
Fax: +54-11-4313-8180
Two very important political events happened this month. First, the election in the province of Misiones, where an allied of President Kirchner sought to amend the provincial constitution. The other relevant piece of news is related to the draft law presented in Congress by Senator Cristina Fernández de Kirchner to bring down the number of Supreme Court justices from nine to five.
With regards to the Misiones election, it is worth mentioning that its Governor, with full support of President Kirchner, called for elections to amend the constitution so that no limits are imposed for the number of governor reelections.
The Governor was very clearly defeated by the opposition headed by a retired catholic bishop, Joaquin Piña. This defeat was construed as a strong message to the current political administration in the sense that Argentine citizens are not in favor of unlimited reelections and that there is willingness to see improvements in the country’s institutional quality.
President Kirchner was fast enough to read the Misiones message and exercised his influence on several governors who ran for reelection, among them the Governor of the province of Buenos Aires. Also as a possible consequence of the clear request of more institutional quality, in mid-November, Senator Cristina Fernández de Kirchner announced that she would file a proposal in Congress to bring down the number of Supreme Court justices from nine to five. The project was presented and approved in the Senate unanimously.
At present, the Court is incomplete since it is operating with 7 of its 9 members due to President Kirchner’s abstention from filling the two remaining vacancies. Thus, the Supreme Court, although incomplete, is still ruling with a majority of five on every case. The bill stressed that the number of justices will be reduced to five gradually by not replacing the first of the two justices who resign, retire or die.
If the proposed legislation becomes law, the Supreme Court will work with a majority of four out of seven during the transition period, and when achieving the number of five justices, it will decide with a majority of three out of five.
As to the presidential elections to be held in October 2007, there is no clear indication as to who will be the candidate of the current administration. It may all depend on polls.
That is because at this point, rumors about Mr. Kirchner’s willingness to seek reelection are decreasing, and his political allies are indirectly pointing out to his wife, Senator Cristina Fernández, as the possible official candidate. The popular first lady appears to be the strongest candidate of the governing Victory Front Party.
These rumors have become stronger when Kirchner expressed, during a public meeting in populated Greater Buenos Aires district, that he will leave his position when his term ends in 2007. Presidential candidates will be announced in April 2007. We will have to wait until then to know the real intentions of President Kirchner and his wife.
There are many explanations as to the reasons for President Kirchner’s potential resignation to seek reelection. Some say that the President is intelligent enough to know that alternation may serve the presidential couple better than reelection.
Again, nothing is certain on that front, and possibly opinion polls will have the last word. President Kirchner is by far the most popular political figure of the country and his wife is well behind, although for now there is no opposition leader even close. But the Misiones case and Argentina’s history suggest that everything may change suddenly.
In the meantime, Argentines will witness if the massive claim for the improvement of the institutional quality, which was expressed in Misiones and heard everywhere in Argentina, is truly heard or if only “cosmetic” changes are introduced so that old practices survive.
The way in which a message is heard and implemented may be a key factor in the coming elections, at all levels in the country.
Argentina is experiencing a strong fiscal surplus –despite the increase in Government spending- and good winds continue during October 2006.
Argentina’s tax revenue increased 35.1% in October 2006 as compared with the same month last year. The construction activity rose 15.9% in October, also as compared with the same period of 2005.
Consumer prices rose 0.9% in October 2006, matching September's rate, as price controls imposed by this Administration helped restrain inflation within its target range of 8% to 10% this year.
According to the National Institute of Statistics, the annual inflation rate rose to 10.5%, whereas consumer prices rose 8% in the 10 months through October.
Private credit keeps recovering (34% annually), though it still represents 11% of the GDP.
Resolution number 13/2006 was issued by the Office of Corporations. This resolution concerns the administration of corporations, since it regulates the announcements required by Argentine Corporate Law for the attendance to Meetings of Shareholders.
For additional information you may read the November edition of our Boletín Informativo.
- You can access the Argentina chapter of “The International Comparative Legal Guide to Merger Control 2007”, published by Global Legal Counsel, written by Jorge Otamendi and Juan Yofre, partner and associate at G. BREUER, respectively, by clicking here.
For further information, please contact Jorge Otamendi (joo@gbreuer.com.ar) or Juan Yofre (jyofrejyofre@gbreuer.com.ar).
- For those who would like to read more on local legislation, not included in this edition of G. BREUER's Newsletter, you may see the November edition of our Boletín Informativo sent to our Argentine Clients & Friends.
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 aim to provide comprehensive legal advice on any issue.
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© G. BREUER, 2006