There are signs that the worst confrontations between the Argentina Government and its labour unions are past.
There are signs that the worst confrontations between the Argentina Government and its labour unions are past. Unions, stunned by the recent increase in prices, several hundred per cent in many cases, have demanded huge pay rises to compensate for their loss in purchasing power. But the Government appears to be holding the line.
In recent days settlements have been negotiated with the powerful textile and metal workers' unions and with many smaller unions as well. Still, some unions, notably journalists and bus drivers, have gone on strike to protest their settlements.
Meanwhile, citizens continue to be amazed and shocked at the astronomical rise in the price of some consumer goods and services. Taxi fares have jumped 140 per cent; meat, 250 per cent; per cent. Gas and electricity rates have also risen sharply.
The sudden surge in prices occurred after President Maria Estela Peron named Celestino Rodrigo as the new Minister of the Economy in early June. Within 60 hours of taking office, Senor Rodrigo announced & drastic programme to combat inflation, than running at 80 per cent.
His programme called for the immediate devaluation of the peso by 50 per cent and the removal of some price controls. The Government has been trying to control wages and prices and the sudden relaxation triggered a wild escalation of prices which severely eroded the value of the average pay packet.
Unions, most of whom were then in the process of negotiating wage increases, reacted by demanding as much as 100 per cent more to make up for their losses. Many unions confronted the Government with massive demonstrations and strikes. In some cases there were injuries as police clashed with demonstrators.
President Peron and Senor Rodrigo, who had hoped to keep pay increases in the range of 38 per cent, promised a 65 per cent increase in the minimum wage. Since then, negotiated increases have averaged about 60 per cent including fringe benefits.
Argentina citizens have been told by President Peron that the unpleasant economic medicine is necessary because "the country is sick". Argentina now has a foreign debt of 9,000 million pounds. Its exports have fallen off during the period of world recession, leaving many port facilities idle and allowing the accumulation of a 13,500 million pounds balance of payment deficit.
Senor Rodrigo has said the devaluation is designed to return to the country its capacity to export and to decrease its incentive to import. He considers this an important step along the road to economic recovery for Argentina.