After last night’s zoom of the governors with heads of block of Deputies, the Casa Rosada rejects modifying the 2025 Budget
Frontal rejection: “zero deficit is not negotiated.” The Pink House hardens her stance and does not seem willing to give in after the zoom of governors dialogueists who demand a 5-point menu in the negotiation for the 2025 Budget in the Chamber of Deputies.
“The five points that the governors demand are unacceptable, the zero deficit is not negotiated,” was the blunt response of an official with an office in Casa Rosada after the announcement by the provincial leaders to request the chief of staff, Guillermo Francos, and the Minister of Economy, Luis Caputothe formation of “a negotiation table to agree on the Budget in extraordinary sessions.”
Tension over Budget 2025
However, the National Executive Branch does not plan to call extraordinary sessions if there is no prior support from the governors for the Budget project prepared by La Libertad Avanza and which does not include the demands of the provinces in relation to co-participation funds, co-participation of the fuel tax and the payment of the Nation’s debt with the provincial pension funds not transferred, among other items.
After the almost unconditional support of the governors for the Executive’s projects in Congress, including the maintenance of the veto of the retirement mobility law, the university financing law, the approval of the Bases law and the defense of decree 70/ 2023 in the Chamber of Deputies, the dialogue opposition of the PRO and the UCR, through their provincial leaders, also held a special session where the scope and validity of the DNU, the main instrument of government, would be limited of Javier Milei before the parliamentary minority he holds in both Chambers.
Espert Martínez Bullrich Budget and Finance Commission
Mariano Fuchila
But that summary of kindnesses was not enough and the Casa Rosada, after all those shows of faith from the governors, for now leaves them without a 2025 Budget. The ruling party estimates that the fiscal cost of the provinces’ requests is around US$ s4,000 million and they are not willing to give in on those specific demands of the provinces.
Governors’ claim
In last night’s zoom between block heads and the governors of the PRO, the UCR and the provincial parties, it was resolved to designate Rogelio Frigerio (Entre Ríos) and Alfredo Cornejo (Mendoza) as interlocutors with Francos and Caputo. But the negotiation table proposed by the provincial leaders began awry due to the Casa Rosada’s preliminary rejection of the provinces’ menu of demands:
- Financing of the deficit of the provincial provisional funds not transferred in accordance with the fiscal pacts. The Government, for now, does not move from the $254 million allocated.
- Financing of the compensation of the 2017 Fiscal Pact
- Eliminate the specific effects of the fuel tax whose funds, in the opinion of the governors, are underexecuted. They want them to participate
- Reduction of the contribution made by the provinces of the co-participating funds to finance the AFIP (now ARCA)
- Co-participation of undistributed Treasury Contributions (ATN)
From the perspective of the governors, the approval of the 2025 Budget is crucial not only for the provinces but also for the national government. Mauricio Macri considers that the support of the PRO was decisive for the political sustainability of the fiscal adjustment and allowed the consolidation of the reduction in inflation, country risk and exchange rate stability. The allied governors not only suffer from financial asphyxiation derived from the drop in activity that leads to a drop in revenue, but they will also have to face an electoral year in full territorial expansion of La Libertad Avanza.
Without calling extraordinary sessions, which can only be carried out by the President who is also in charge of setting the parliamentary agenda, the opposition is left without tools of pressure and/or political negotiation. The regular sessions end on Wednesday of next week.
That is why the Federal Meeting of Miguel Pichettoand the radicals of Democracia para Siempre, where the deputies of the governors Maximiliano Pullaro (Santa Fe) and Carlos Nadir (Jujuy) are, requested a special session to try to overturn the DNU that authorizes the national government to advance with the debt exchange without authorization from Congress.
Source: Ambito
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