Argentinean government thrown into crisis

Only six months into her term as president, Cristina Fernandez de Kirchner faces a massive crisis following the decision by Vice-President Julio Cobos to vote against Fernandez's proposed tax increases on food exports, breaking the senate vote deadlock in favour of the opposition.

The previous day, close to 100,000 people had come out onto the streets in defence of the government's project, while almost double had attended a nearby anti-government demonstration.

Faced with her lowest popularity rates since coming to power, this recent defeat will only weaken the government in the face of a resurgent right wing longing for a return to the days of neoliberalism.

The dispute traces back to the March 11 decree on implementing a system of variable tax increases tied to world prices for the export of soya, wheat and sunflower oil. Hoping to capitalise on the extraordinary rent from the countryside resulting from high prices with the taxes, the government was confronted by massive, united opposition from the four main agricultural institutions.

For over 100 days, the organisations representing a united bloc of small to large producers, organised roadblocks against the decree that led to crippling food shortages in the cities.

During that time, they also organised one of the largest anti-government demonstrations in recent history with more than 200,000 people marching on May 25. The government also rallied its supporters in the northern city of San Miguel de Tucuman the same day, with a much smaller turnout.

Forced to partially retreat on the initial project, the Fernandez government first moved to lessen the tax burden on small producers and then proposed to put the controversial law to a vote in congress, hoping to rely on its majority to get the votes.

However, fractures in its government coalition and the loss of support from some allied governors meant that the government's position continue to weaken in the face of mounting protests.

Fernandez was elected on the basis of alliances constructed with defectors from parties traditionally opposed to her own Peronist (nationalist-populist) Justicialist Party (PJ), while two other PJ candidates stood against her.

These alliances were a reflection of the continuing disintegration of the traditional party system, following the 2001 economic crisis and subsequent popular uprising, which signified a rupture in the neoliberal economic policies implemented by successive governments.

Policies, continued by Fernandez, were implemented supporting greater regional integration and more state regulation in order to stimulate development and strengthen national capital as a way out of the crisis.

Winning just under 45% of the vote, Fernandez won the national vote but lost in the three largest cities in Argentina. In large part, Fernandez won the elections on the back of the votes of those rural sectors that have since mobilised in large numbers against her government.

In this situation, those sectors opposed to state regulation and in favour of retaining the huge profits generated in the countryside for themselves have come out strengthened.