May 28, 2021


1. The government receives German support in IMF negotiations

President Alberto Fernández held a virtual meeting on Wednesday with German Chancellor Angela Merkel, who reiterated her country’s support for Argentina in its negotiations with the IMF. In addition to Germany, Spain, Portugal, Italy and France have made their support for Argentina clear. Merkel stated that it is necessary to reach an agreement that satisfies the procedures of the International Monetary Fund and the Paris Club, that is to say, that it can be fulfilled in time. In relation to the latter, although the maturity of the USD $2.4 billion expires at the end of the month, Argentina has a 60-day grace period to comply with its debt obligations. On the other hand, a sector of the majority party, which supports Vice President Cristina Fernández de Kirchner, issued a statement on May 25th (the day commemorating the May Revolution) requesting the suspension of principal and interest payments with the IMF and the Paris Club, while the COVID-19 health emergency is extended. In addition, the bloc proposed to renegotiate debt maturities with terms in accordance with the “real payment possibilities of the country” and to use the transfer of the quota corresponding to the country by the IMF to strengthen the international reserves of the Central Bank, in view of the problems derived from the COVID-19 pandemic, among others.

Infobae: Alberto Fernández confirmó que Ángela Merkel apoyará su negociación con el Fondo Monetario Internacional y el Club de París
Cronista: El ultrakirchnerismo le pide a Fernández “privilegiar la salud y después la deuda”

2. Bill delaying elections and modifying income taxes for businesses advances

Following the long weekend, the Senate resumed legislative activity across several committees. First, Interior Minister Eduardo de Pedro and Political Affairs Secretary Patricia García Blanco visited the Constitutional Affairs Committee to defend the bill that would extend the electoral calendar, postponing mandatory primary elections to September 12th, and the general elections to November 14th. Additionally, the committee approved the final text of the bill, thanks to the consensus existing between the ruling party and the opposition on this matter. On the other hand, the Budget and Finance Committee emitted an opinion to the project that reforms income tax for corporations, in order to move forward in its treatment in the Chamber towards its final approval. The text, which was not modified, establishes that companies with a taxable profit of up to ARS $5,000,000,000 (USD $52.87 million) would pay a marginal 25% rate; between ARS $5,000,000,000 and ARS $50,000,000,000 (USD $528.7 million), 30%; and on profits over AR$ 50,000,000,000, 35%. In a similar vein, Decree 336/2021 allowed the government to regulate the modification of the minimum non-taxable income tax for employees. Both opinions will be discussed next week in the Chamber of Deputies. Although Juntos por el Cambio refused to support the second initiative, the Frente de Todos can pass it without support, given that it has a majority.

Ámbito Financiero: Senado: obtuvo dictamen de comisión el proyecto sobre Ganancias de empresas
Ámbito Financiero: Senado: obtuvo dictamen el proyecto para posponer las elecciones

3. Prohibition on work dismissals and suspensions extended by 30 days

In a meeting with his economic team, President Alberto Fernández made the decision to extend the prohibition on dismissals and suspensions without just cause by 30 days, to cover the month of June. It is worth noting that this measure was in effect on a quarterly basis even before the pandemic; the measure was extended across all economic sectors with the exception of the public sector. This measure was added to double compensation, which had also been taken prior to the pandemic, and which was extended in January 2021 until the end of the year. The cost of the announced measures would be equivalent to 1.3% of the GDP, which implies about ARS $480 billion (USD $5.08 billion). Finally, Decree 345/21, published in the Official Gazette on Friday, made the decision official.

Ámbito: Diputados aprobó la postergación de las PASO y de las elecciones generales
La Nación: Diputados dio media sanción al proyecto que modifica el impuesto a las ganancias de empresas
Cronista: Diputados aprobó el impuesto a las Ganancias para empresas con cambios en las escalas del proyecto original

4. The government accelerates the vaccination campaign, after implementing new restrictions

Within the framework of the movement restrictions in high-risk areas, the national government seeks to increase the number of people vaccinated through the arrival of Sputnik V and AstraZeneca vaccines. More than 1.6 million doses of these vaccines arrived on Monday, through different mechanisms. The Argentine government signed a contract with businessman Hugo Sigman last year for a total of 22 million doses, which have not yet arrived. It was for this purpose that the Health Minister Carla Vizzotti, traveled to Mexico, where the vaccine is produced, together with presidential advisor Cecilia Nicolini – and President Alberto Fernández virtually – appeared in Mexican President Andrés Manuel López Obrador’s morning conference. The health official also announced that 4 million vaccines will arrive this week. Additionally, the national government confirmed a new agreement with the Chinese laboratory CanSino Biologics for the supply of new vaccines against the coronavirus.

Télam: Llegaron más de 1,6 millones de dosis para reforzar el plan de inmunización
La Nación: Carla Vizzotti: “Esta semana vamos a recibir 4 millones de dosis de AstraZeneca”
Perfil: Con AMLO, Alberto Fernández celebró la “independencia de poder tener nuestras vacunas”

5. Agreement between meat exporters and government advances

After the Ministry of Agriculture, Livestock and Fisheries published Resolution 75/2021, which suspended meat exports for 30 days, the national government maintains ongoing discussions with meat exporters to increase the volume of cuts at low prices available in the local market, which would allow for exports to be reinstated. Both parties will seek to close the agreement as soon as possible, while the strike decreed by the Mesa de Enlace, the body that brings together the representative organizations of the agricultural sector, will continue until Wednesday of next week. On the other hand, within the framework of the government’s firm decision to contain food prices, guarantee food supply, and regulate competition, the Secretary of Domestic Trade, Paula Español, began the process of inspection for the correct implementation of the Law of Gondolas, regulated in December 2020, which seeks to guarantee a greater supply of products in large supermarket chains.

La Nación: Cepo a la carne: el Gobierno rechazó una propuesta de los exportadores