July 12, 2019
1. Electoral Panorama
During the celebrations recognizing Independence Day last Tuesday, the leading candidates across the political spectrum appeared at various events. President Mauricio Macri and vice-presidential candidate and Senator Miguel Ángel Pichetto participated together in official celebrations in the Province of Tucumán and the military parade which took place in Buenos Aires. Leaders of the Peronist “Frente de Todos” appeared at an event in Necochea, highlighted by the participation of presidential candidate Alberto Fernández, Buenos Aires gubernatorial candidate Axel Kicillof and leading Buenos Aires congressional candidate Sergio Massa. In the province of San Juan, Consenso Federal, the Roberto Lavagna and Juan Manuel Urtubey presidential ticket held an event in with the hopes of consolidating themselves as a “third way.” On Wednesday, July 10th, Macri’s “Juntos por el Cambio” coalition met in a bid to standardize their message among candidates and campaign chiefs across the country. President Macri closed the event where he gave a speech discussing his administration’s successes, calling on Argentines to reelect him. On the next day, Macri met with provincial governors to explain the parameters set by Mercosur’s recent agreement with the EU.
2. IMF prepares a new disbursement for Argentina of US$5.4 billion
The Executive Board of the International Monetary Fund (IMF) is preparing to approve today in Washington a new disbursement for our country, this time of US$ 5.4 billion, the fifth of a total loan of US$ 57,000 million. With this draft, the agency will have sent the country US$ 44.6 billion since the plan was implemented last year. The money is estimated to help the government to move with financial tranquility during these months of the electoral process. On the other hand, the Government announced a primary fiscal surplus of AR$30.221 million in the result of the public accounts of the first semester of the year and in this way, it assured that it managed to “surpass” the fiscal goal of the period. “We have taken the first steps to achieve a healthy Argentina, which is necessary for sustained growth and to reduce poverty,” said the Finance Minister.
Ámbito Financiero: Libera hoy el FMI los u$s5.400 millones
3. U.S. Justice reject a request from the fund that is litigating against Argentina for the expropriation of YPF
The Burford fund, which is litigating against Argentina for the expropriation of the oil company YPF, obtained yesterday a rejection in the U.S. Justice. The fund asked the U.S. judge, Loretta Preska, to begin the trial. If the trial is lost, it could cost the Argentine state up to US$3 billion. The judge in charge of the Southern District Court of New York dismissed the petition. YPF and Argentina want to prove that the Argentine courts are competent to settle the dispute, which arose from the expropriation of YPF by former President Cristina Fernández de Kirchner. Burford, who bought the rights to litigate at the bankruptcy of the Petersen group in Spain, opposes that position. Judge Preska did not directly validate Argentina’s arguments, but it will evaluate them.
4. Macri administration hopes to spur natural resource production in Vaca Muerta with new gas pipeline
The Macri administration instructed the Secretary of Energy to hold a public tender that will grant a license to transport natural gas and build Argentina’s third gas pipeline from the Cuenca Neuqina to the Buenos Aires metropolitan area and the Argentine Littoral under a temporary special regime that would be valid for a period of 17 years. Macri signed Decree 465/2019 which will act as a starting point for the tender which will be held before the end of the month. The temporary special regime will include the “payment of shipping and corresponding adjustments that will be freely negotiated without falling into discriminatory conducts,” according to the Secretary of Energy.
5. Argentine government increases export withholdings on soy derivatives, decreases withholdings on other products
By means of Decree 464/2019, the Macri administration established a reduction in export withholdings for 207 products linked with regional economies. The export duties were reduced to ARS $3 for every USD $1 exported, as opposed to the ARS $4 that was being paid before. On the other hand, products derived from soy, including animal feed and oils, will have to pay ARS $4 for each USD $1 exported, as opposed to the ARS $3 that was being paid before. The measure will cost the government ARS $2.2 billion (USD $52.8 million) and came into effect on July 11th. The government hopes that the modification will boost development among regional producers and increase competition for producers to continue investing, creating value and employment where they operate.