It has been a summer of discontent in Argentina.
In December, police forces in 20 of the country's 24 districts went on strike to protest low salaries, sparking the worst bout of looting since 2001. A heat wave then knocked out power in Buenos Aires during the holiday season, leaving tens of thousands without electricity.
A combination of political torpor and economic fragility once again has raised questions about the precariousness of the country's position.
A few months ago, things looked rosier. After brain surgery that forced her to rest six weeks, President Cristina Fern°ndez de Kirchner returned to work in November with aplomb. First, she purged her cabinet of some of its more ineffectual ministers. Next, she OK'd a $5-billion offer to compensate Spain's Repsol for the 2012 nationalization of the oil company Y.P.F., of which it had been the majority owner. Fern°ndez even abandoned the widow's weeds she had worn since her husband Nestor's death in 2010.
Clothes are easier to shed, however, than Argentina's grievances, exemplified by striking police. Although police salaries are not meagre, they are devoured by inflation, which private economists estimate at 25 per cent and rising. Having seen the police win raises by abandoning their posts, other public-sector employees may do the same. Railway workers and teachers' unions are demanding wage hikes of around 30 per cent.
As for the blackouts, the unusually warm weather was not the only factor. Electricity and gas tariffs have been artificially depressed since 2002, when then-president Eduardo Duhalde forbade the country's private energy providers from charging more. Improvements to Argentina's decaying electrical grid have been put off. Energy firms rely on government subsidies, estimated at around $11 billion in 2013, to cover their costs.
Fern°ndez, therefore, is in a quandary. Holding wage hikes below inflation and quietly cutting subsidies is politically untenable, but continuing to spend will add to Argentina's monetary and fiscal pressures. Dante Sica of Abeceb.com, an economic consultancy, estimates large pay raises for provincial public-sector employees could double the provinces' fiscal deficits. On Jan. 3, the federal government, which itself is in the red, agreed to roll over the debt of 18 provinces to help ease their financial strains.
The government is resorting to familiar tactics to square the circle. It has negotiated an accord with supermarkets to freeze the prices of 193 common goods such as beef, milk and sunflower oil. It is blaming the electricity firms for the blackouts: On Jan. 7, the planning ministry seized the providers' meagre grid-improvement fund. To stop the draining of foreign-exchange reserves, it raised taxes on credit-card purchases made abroad from 20 per cent to 35 per cent.
Such controls are not new -- the government has, in effect, banned the sale of foreign currency at the official exchange rate since 2011 - but they fuel frustration.
Argentina's political classes already have their eyes on presidential elections in 2015. Fern°ndez was conspicuously absent during the period of the blackouts, on vacation in Patagonia. Her own ambitions may now extend only to handing over the country's problems to a successor.
That will depend on how well Argentina marshals its international reserves. By the end of 2013, those reserves had fallen to $30 billion. Argentina's energy deficit will reach $9 billion this year, according to energy consultant Daniel Montamat.
To ensure that reserves do not dry up entirely, the government needs a good 2014 harvest and quiescent farmers. Agriculture is a crucial source of dollars, accounting for most of the country's $10-billion export-tax take in 2013.
Taxes are a sore point for farmers struggling with rising costs and an overvalued peso, however. Farming groups almost brought Fern°ndez down in 2008 by withholding sales. A repeat of this tactic in 2013 fizzled because many small producers could not afford to forgo earnings.
Argentina may not be in outright crisis, but it is far from being stable.