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Weekly Report - 18 February 2016 (WR-16-07)
ARGENTINA: Macri’s difficult dealings with the unions
The new Argentine government is at a tricky point in its opening game plan. Put crudely, step one was to begin tackling the country’s economic imbalances by removing exchange rate controls and letting the peso float. That step went well. It was acknowledged, however, that peso depreciation would lead to a temporary surge in inflation, hence the importance of step two: negotiating with Argentina’s traditionally powerful labour leaders to get them to accept wage restraint in the ‘paritarias’ – the annual wage negotiations. This one is looking more difficult.
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