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Argentine Unions Block Roads in First Fernandez-Era Strike

Argentine President Cristina Fernandez de Kirchner
Argentine President Cristina Fernandez de Kirchner, who was re-elected by a landslide in October 2011, has maintained the policies of her late husband and predecessor, Nestor Kirchner, which include boosting wages, pensions and government spending to stimulate consumption and bolster demand for locally made goods. Photographer: Alejandro Pagni/AFP/Getty Images

Argentina’s biggest trade unions blocked highways and halted train, bus and port services in their first general strike against President Cristina Fernandez de Kirchner to protest rising prices and higher taxes.

Trash piled up along sidewalks of near empty streets in Buenos Aires while flights were disrupted and banks shuttered. The one-day stoppage by workers represented by the General Labor Confederation and the Argentine Workers Association is the first stoppage in at least nine years, according to union leaders.

“The strike reflects the discontent of the people with the government, with the economy and with the lack of response,” said Geronimo Venegas, who represents 850,000 farm workers. Inflation of 27 percent is “freezing the domestic market because it’s hurting workers’ purchasing power,” he said by phone today.

Fernandez, 59, was re-elected by a landslide in October 2011 on policies to increase wages and pensions to stimulate consumption. Since then, her popularity has plunged as rising prices erode purchasing power, workers pay more taxes and growth in South America’s second-largest economy stalled. Today’s stoppage follows a Nov. 8 protest by about 2 million people demonstrating against Fernandez’s failure to combat crime and rein in inflation.

Slowdown, Confidence

Union demands include an increase in the threshold at which wages start to be taxed and an increase in the minimum salary to 3,500 pesos ($729) per month from the 2,875 pesos the government has announced for February 2013. As wages rose an average 25 percent this year, in line with the inflation rate estimated by private economists, more workers have become subject to income taxes.

“The government should listen to the silence that was in the streets, in factories today,” Hugo Moyano, head of the General Labor Confederation told reporters today. “We will continue with our claim over the income tax payments -- workers shouldn’t pay taxes for their work.”

According to Venegas, about 100 percent of workers joined the strike in some parts of the country.

Unemployment rose to 7.6 percent in the third quarter, the highest since the second quarter of 2010, the government’s statistics institute reported yesterday.

‘Tired of Lies’

“We are standing up because we are sick and tired of lies,” Geronimo Venegas, a union leader who represents 850,000 agriculture workers, told reporters yesterday. “The government takes part of our salaries as income taxes, has abolished some social security handouts and uses and wastes pensioners’ funds.”

The strike is “extortive and inappropriate,” Interior and Transport Minister Florencio Randazzo said yesterday, according to the presidential website. He said that the strike is political as it seeks to damage the government.

The economy of the world’s third-largest soybean exporter stalled in the second quarter for the first time since 2009, as the global crisis and a slowdown in Brazil led to lower demand for Argentine goods.

Port workers adhered to the strike, Guillermo Wade, an official at the port exporters chamber, said by telephone from Rosario, the riverside town from which most of the country’s soybeans and oilseed products are shipped.

Confidence, Borrowing Costs

The slowdown in activity led confidence in the government to fall for a fifth consecutive month in October, according to a poll released by Torcuato Di Tella University on Oct. 31. The confidence index dropped 36 percent from a year earlier, the survey of 1,209 people showed. Confidence fell 1 percent in October from September to 1.67 on a scale of zero to five.

Argentina, which defaulted on a record $95 billion of debt in 2001 and remains locked out of international capital markets, has the highest borrowing costs of major emerging-market economies.

The extra yield investors demand to own Argentine debt over U.S. Treasuries fell 4 basis points, or 0.04 percentage point, to 1,167 basis points at 12:04 p.m. in Buenos Aires, according to JPMorgan Chase & Co.’s EMBI Global index.

The popularity of Fernandez, who first took office in 2007, has plunged by more than half since her re-election with 54 percent of votes, according to a survey by Buenos Aires-based pollster Management & Fit.

Waning Popularity

The Oct. 18-29 survey showed her approval rating dropped to 28 percent from 63.3 percent a year earlier. The poll of 2,100 people had a margin of error of 2.3 percentage points.

Fernandez’s loss of backing comes at a time when supporters are seeking to amend the constitution to allow her to run for a third term in 2015. Lawmaker Diana Conti said in an Oct. 31 interview with Radio Continental that the present system, which sets a maximum of two consecutive terms, is “ridiculous.”

In the Management & Fit poll, 66 percent of respondents opposed a reform of the charter, while 27.5 percent were in favor.

As a constitutional amendment will require the approval of two-thirds of Congress, Fernandez’s supporters are counting on the 2013 mid-term elections to add lawmakers to her coalition.

Fernandez has sidestepped questions about her political future, saying “it doesn’t depend on me,” on Sept. 28, during an exchange with students at Harvard University in Cambridge, Massachusetts.

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