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Inflation plays role in Argentine teacher strike

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Jorge Sanchez/Reuters

(Read caption) Argentina's president, Cristina Fernández de Kirchner, speaks with the media as she attends the summit of the Community of Latin American, Caribbean States and European Union in Santiago, Chile, in January. Ms. Kirchner's refusal to acknowledge the soaring inflation rate has now led to a strike by teachers unions.

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Following a demand this month from the International Monetary Fund to improve her government's data, Argentine President Cristina Fernández de Kirchner’s refusal to acknowledge the soaring inflation rate has now led to a strike by teachers unions – and all this in an election year.

More than 5 million schoolchildren who were supposed to start classes yesterday after the summer break stayed home, as teachers in 17 provinces went on strike this week.

Union wage-bargaining season is kicking off here, and Ms. Kirchner’s administration is facing its first confrontation: It won’t budge from a 22 percent minimum rise, while teachers want 30 percent.

The problem is that 22 percent is several points below the accepted annual inflation rate, so wages come short of matching the rising cost of living.

Private economists – who have been fined for publishing data that does not coincide with INDEC, the government’s discredited statistics agency – believe the inflation rate for 2012 was a little more than 25 percent. The government says it was around 10 percent.

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But if Education Minister Alberto Sileoni were to offer a 30 percent increase it would be “clearly admitting that the INDEC rate is fictitious,” writes Ricardo Roa, deputy executive editor of Clarín, an antigovernment daily, in an op-ed today.

Earlier this month, the International Monetary Fund threatened Argentina with sanctions should it fail to adhere to its rules on reporting inflation and gross domestic product. Last year, Christine Lagarde, head of the fund, said she would pull out the “red card” for Kirchner’s government if it doesn't comply, a reference to how players are expelled from the soccer field for serious foul play.

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Many teachers across Argentina, including in Buenos Aires, have continued the strike today. Classes are not expected to get under way properly until Thursday, and there are threats of another 48-hour strike next week.

Kirchner has already alienated some union leaders – the traditional power base of her Peronist party – with the first general strike of her administration taking place last November.

The teacher conflict means she is now facing revolt from groups that belong to the pro-government wing of Argentina’s biggest umbrella union.

With midterm elections coming up in October, that's bad news. In a bid to temporarily hold back inflation, she recently ordered supermarkets to freeze prices for two months, but that will do little to ease wage demands from other sectors. Negotiating those demands may be key to October's outcome.

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