Argentina paralyzed by anti-IMF deal strike

Most of the city deserted

BUENOS AIRES, June 25, (AFP): Argentina’s unions paralyzed the country with a 24-hour strike on Monday in protest at the government’s latest deal with the International Monetary Fund.

With no trains, subways, buses or flights in service, organizers expected at least one million workers to take part in the industrial action.

Although the General Confederation of Workers (CGT) called only for a strike, more radical groups organized demonstrations that cut off access to Buenos Aires.

Toward 7:00 am (1000 GMT), activists began to close off the main routes into the capital where hundreds of federal law enforcement personnel were deployed. Most of the city was deserted, including schools. “The strike is against the economic program ... The IMF has always brought hardship to the Argentines,” CGT director Juan Carlos Schmid told AFP.

He described the strike as “the biggest in eight years.”

The unions are demanding that salary negotiations for this year be reopened in order to align them with projected inflation, calculated at 27 percent by the central bank and which could rise to 30 percent by year’s end.

Negotiations mostly took place at the start of the year, when the annual inflation target was 15 percent — a goal which had been abandoned by May.

In the interest of maintaining dialogue with the unions, labor minister Jorge Triaca said his office was in favor of such negotiations.

Following a currency crisis in April and May, in which the peso shed roughly 30 percent of its value, the IMF announced a $50 billion standby loan for Argentina in early June after Latin America’s third-largest economy sought help to bolster market confidence.

Argentina has a bitter history with the global crisis lender, which many Argentines view as having imposed tough conditions that worsened economic pain 17 years ago.

As the strike gripped Buenos Aires Monday, only a few cars could be seen on the city streets, which were quieter

Sales in the South, which accounts for the bulk of transactions, rebounded 17.9 percent to a rate of 409,000 units in May, the highest level since July 2007. The increase ended two straight months of declines.

Sales tumbled 10.0 percent in the Northeast and dropped 8.7 percent in the West. They were unchanged in the Midwest.

New home sales are drawn from permits and tend to be volatile on a month-tomonth basis. They increased 14.1 percent from a year ago. New home sales are getting a boost from an inventory crunch in the market for previously owned houses.

A report last week showed existing home sales falling for a second straight month in May.

Supply has lagged strong demand for housing, which is being driven by a robust labor market, leading to a sharp increase in home prices. Economists say high mortgage rates so far do not appear to be dampening demand. The 30-year fixed mortgage rate averaged 4.57 percent last week and has risen more than 50 basis points this year. Further increases are likely after the Federal Reserve raised interest rates earlier this month for a second time this year and forecast two more rate hikes by the end of the year.

US stocks were trading sharply lower on Monday on investor concerns about escalating tensions between the United States and its trading partners, while prices of US Treasuries rose. The dollar was slightly weaker against a basket of currencies.

The median new house price fell 3.3 percent to $313,000 in May from a year ago. That was the lowest price in a year. The drop in new home prices is likely to be temporary.

There were 299,000 new homes on the market in May, up 1.0 percent from April. Supply is just over half of what it was at the peak of the housing market boom in 2006.

Builders are struggling with higher lumber prices as well as labor and land shortages. A survey last week showed confidence among single-family homebuilders dipped in June, with builders “increasingly concerned that tariffs placed on Canadian lumber and other imported products are hurting housing affordability.”

The Trump administration in April 2017 imposed anti-subsidy duties on imports of Canadian softwood lumber.

Residential investment contracted in the first quarter and economists expect housing will subtract again from gross domestic product in the second quarter.

The housing market is lagging overall economic growth, which appears to have regained speed in the second quarter after slowing at the start of the year. Growth estimates for the April-June period are as high as a 4.7 percent annualized rate. The economy grew at a 2.2 percent pace in the first quarter.

At May’s sales pace it would take 5.2 months to clear the supply of houses on the market, down from 5.5 months in April. Nearly two-thirds of the houses sold last month were either under construction or yet to be built.

All of the growth was in the south, which jumped a stunning 17.9 percent to an annual rate of 409,000 units, the highest level since July of 2007, before the global financial crisis, and the largest one-month increase in three and a half years.

Demonstrators holding masks rpicting Britain’s Transport Secretary Chris Grayling protest at King’s Cross rail station in London on June 25, during a photocall for the relaunch of the London North Eastern Railway (LNER) rail service on the East Coast mainline. The LNER service was relaunched Monday after Britain’s Transport Secretary Chris Grayling announced last month he would bring the franchise back under public control and terminate the

franchise with Virgin Trains East Coast (VTEC), which had overbid and made a loss. (AFP)

than on a Sunday.

“A general strike isn’t enough. We need a battle plan to counter this war plan against the workers,” Marcelo Ramal, a leader of the Workers Party, said at one of the roadblocks.

The finance ministry estimated the strike would cost Argentina’s economy one billion dollars.

“The government is in a tough spot, it is at its very lowest point (in polls) and is strongly criticized by workers” whose wages are losing value against the high rate of inflation, said political analyst Diego Reynoso.

Argentina’s center-right president Mauricio Macri came to power in 2015 after 12 years of leftist rule by the late Nestor Kirchner, who held office from 2003-2007, and then his wife Cristina, who was president from 2007 until late 2015.

Macri, a free-market businessman and a former mayor of the capital, scrapped many subsidies his predecessors had granted on a variety of services, most notably electricity, gas and water.