September 11, 2020
1. The government takes tax-sharings proceeds income from the capital and reallocates to province of Buenos Aires
The measure announced by President Alberto Fernández was made official through Decree 735/2020, which created a financial strengthening fund for the province of Buenos Aires. With this measure, the province will be allocated an additional 1.4% of proceeds from tax-sharing, with the goal of resolving salary complaints from it’s police. According to projections, this represents a sum of ARS $35 billion (USD $467.6 million) that will now be in the hands of the province. Provincial Governor Axel Kicillof announced that integral security plan set forth by his administration includes a salary increase for the province’s police.
2. 98.8% of creditors join in on local debt swap deal
Economy Minister Martín Guzmán announced last Friday that the national government was able to restructure 98.8% of bonds in U.S. dollars emitted under local legislation. Therefore, the result of the early acceptance period of the offer was an overwhelming majority of eligible securities being exchanged for new dollar bonds. In this vein, the minister referred to the announcement as a “fundamental starting point in the process of calming the Argentine economy.” Additionally, he assured that the debt swap de-dollarized USD $687 million and that the lowest commission in the history of swaps was paid: 0.028%. Finally, he stated that the swap proposals for bonds emitted under both foreign and local currency will remain open until September 14th. “There is still time to join in” on the bond exchange and added that even with the 1% of bondholders who have not yet done so, it will “move forward in an orderly manner.”
3. The fifth version of ATP will contain new credit scheme at subsidized rate
The Productive Development Ministry revealed the details of its “credit at subsidized convertible rate” plan for firms whose nominal sales in July varied between 0 and 40%. These firms will have a guarantee from the Argentine Guarantee Fund (FOGAR) and an interest rate of 15% with a three month grace period, to be paid in 12 installments. The government will reintegrate 100% of the credits at a subsidized rate for businesses receiving Production and Labor Assistance Program (ATP) benefits and contract personnel over the next year. Businesses that comply with employment goals and credit repayment will receive a complete or partial reimbursement from the Ministry of Productive Development, via the National Productive Development Fund (FONDEP).
4. Government relaunches installment-based consumption program “Ahora 12”
With the objective in mind of reactivating consumption, the government announced the relaunch of the Ahora 12 plan, with more categories included for consumers to pay for goods in 12 or 18 installments at a 20% interest rate. The announcement was made during an event recognizing the Quilmes brewery’s 130th anniversary, attended by President Alberto Fernández, Productive Development Minister Matías Kulfas, Buenos Aires Governor Axel Kicillof and Interior Commerce Secretary Paula Español. The categories of products falling under the Ahora 12 plan include educational services, personal care, repair services and alarm installation. “All programs of 12 and 18 installments will have a three month grace period to begin payments,” stated Secretary Español. It is worth noting that the following categories of products are still included in the Ahora 12 plan: foods, beverages, personal hygiene and cleaning; medications; perfumes; eyewear; clothing; footwear and leather; major appliances, televisions, small household appliances; computers, notebooks and tablets; 4G cell phones; furniture; mattresses; lighting; construction materials; toys; books; musical instruments; sporting goods; bicycles; motorcycles; tires, accessories and replacements; tourism; medical supplies; machines and tools. This way, it only remains for the measure to be made official by the Secretariat of Interior Commerce.
5. The blocks of Deputies agree to convene with majority of legislators to debate controversial bills
On Tuesday, a meeting in the Chamber of Deputies yielded an agreement between the two main coalitions – the Frente de Todos and opposition Juntos por el Cambio – to continue mixed legislative sessions for the next 30 business days. According to what was established in the meeting led by lower house leader Sergio Massa, sessions will continue as they have been in a mixed manner – 47 deputies present and 210 connected remotely – to discuss “non-complicated” bills. Moreover, a presence-based framework was established for “complicated” bills such as the 2021 budget, judicial reform and retirement/pension reform, the causes of last week’s legislative controversies. In this case, an in-person session can be convened by at least 10 legislators and should take place in a big and ventilated area to guarantee social distancing measures set forth by the preventative and obligatory social quarantine policy. Deputies belonging to at-risk groups or those who ask the Chamber leadership with “valid concerns” can participate remotely.