Argentine President presents law to prevent sale of state stakes in firms

Saturday, 22 August 2015 00:00 - - {{hitsCtrl.values.hits}}

Argentina’s President Cristina Fernandez de Kirchner cast her vote at a polling station in Rio Gallegos, 9 August – Argentine Presidency

Argentine President Cristina Fernandez said on Thursday she was sending a draft law to Congress making it harder for the government to sell state stakes in local firms, two months before elections seen bringing a more market-friendly leader to power.

With Fernandez barred from a third consecutive term, the two main candidates are her ruling party’s Daniel Scioli and the PRO opposition party’s Mauricio Macri. Both are expected to move away from her interventionist policies, to varying degrees.

The new law would create an agency to administer the state’s stakes in companies as diverse as regional banks and media conglomerate Clarin. It would require the governments to get two-thirds approval in congress if it wanted to sell a stake.

“It is very important that this .. is a guarantee so no one else can frivolously dispose of Argentines’ patrimony,” Fernandez said in a broadcast speech.

“We are not preventing them being sold, but they should only be sold after a debate.”

Fernandez has expropriated several companies over the years, including a water company, the oil company YPF and the country’s biggest airline, Aerolineas Argentinas. The state also acquired a number of stakes in companies when it nationalised its private pension system.

This policy which scared off international investors was popular at home. Many Argentines fear that if Macri won October’s elections, he could return them to the neoliberal policies and privatisations of the 1990s.

Macri, the conservative mayor of Buenos Aires city, is campaigning on a mandate to unwind state controls on the currency and trade that critics blame for stunted investment and stalled growth in Latin America’s No. 3 economy.

Scioli has promised more gradual change than Macri.

Fernandez used the example of recent privatisations in Greece under the terms of its international bailouts to illustrate the need for the law. The crisis in Greece has prompted political turmoil, pushing Prime Minister Alexis Tsipras to resign earlier on Thursday.

“Tsipras is gone while Germany is left with 14 Greek airports because the process of privatisation has started,” she said, making a jab at Germany which has been more insistent on the bailout terms than other creditors.

Greece confirmed earlier this week it would award concessions to run 14 regional airports to Germany’s Fraport as part of its bailout terms.

“This scenario is repeated tragically and terribly everywhere,” she said. “We will send this law to congress precisely because we do not want this to happen in Argentina.”