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Thu May 31, 2018, 11:05 PM

Argentina's Macri vetoes curbs on soaring utility prices amid IMF talks

Argentina's President Mauricio Macri on Thursday vetoed a law placing curbs on prices of electricity, gas and water, citing a need for fiscal discipline.

The opposition-sponsored law, approved hours earlier by the Senate after heated debate, would have rolled back prices for public utilities to November 30 levels, and linked future hikes to salary increases.

The bill, passed earlier by the Lower House on May 9, was passed by the Senate by 37 votes to 30, with five absentions.

"The law is already vetoed," Macri's chief of cabinet Marcos Peņa told reporters, describing the legislation as "irresponsible."

Macri argued the price cuts would cost $3.9 billion at a time when the government is trying to reign in a ballooning budget deficit, which rose to a record $38 billion (6% of GDP), and seeking a $30 billion stand-by credit line from the IMF.

The Congressional Budget Office instead estimated the cost at $2.5 billion.

The bill would have rolled back hikes in public utility rates since December, which have averaged around 40%.

This round was one of several sharp hikes ordered by the Macri administration, which since April 2016 have averaged 1490% in electricity, 1300% for gas, and 1000% for water.

Utility hikes have cost the average Argentine household around 7.5% of their income - on top of an estimated 10% decline in real pay.

Opposition lawmakers noted, in turn, that profit margins for utilities and distribution firms, three of which are controlled by close friends of the president, skyrocketed in the first quarter of 2018 - in some cases to levels twice as high as in all of 2017.

"This is a direct theft against Argentine pockets by friends and supporters of the president," Senator Marcelo Fuentes charged. "They're no longer resorting to middle men, as they did in the 1990s."

At: https://www.yahoo.com/news/argentinas-macri-vetoes-curbs-utility-prices-amid-imf-155337796.html

Marching by candlelight against Macri's repeated utility rate hikes, Argentines are now paying 15 times more for electricity but enduring two thirds more blackouts.

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