Argentina’s Macri Buys Time With Union, Sidesteps General Strike

  • Macri agrees to step up health-care spending with labor unions
  • Accord eases tensions as inflation soars and jobs are lost

Embattled Argentine President Mauricio Macri averted a national strike after agreeing to step up health-care spending.

The government will take over 30 billion pesos ($2 billion) deducted by labor unions to fund health-care for their members, to help finance the public system. Macri made the announcement Tuesday at the ceremony with opposition politicians and the same union officials who have threatened to strike over job losses and rising inflation.

"It’s politically a very valuable photograph to have taken with the trade union leaders and Peronist governors," said Jimena Blanco, head of Latin America research at risk analysis firm Verisk Maplecroft in London. "It has immediate effect in the eyes of the public."

Macri needed to placate the unions after the removal of subsidies sent gas and electricity prices soaring and pushed inflation to almost 50 percent. While the midterm elections are more than a year away, the political capital the government would gain from health-care reform is worth the fiscal costs, said Juan Cruz Diaz, managing director of the Buenos Aires-based advisory firm Cefeidas Group.

Some aspects of the health-care plan remain unclear, including whether there will be additional costs to create universal access.

"While I think it’s a much-need starting point to reform the system, the implementation will be a challenge," Diaz said.

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