Argentina, Chile coronavirus watch

Argentine President Alberto Fernández issued an emergency decree on Tuesday evening prohibiting companies from firing employees over the next 60 days.

Some exceptions apply.

The move comes after construction firm Techint said it would cut 1,450 jobs.

Argentina is under a national lockdown scheduled to run through April 12 to help stem the spread of the coronavirus, a move Fernández has acknowledged would dent the economy in the short term.

Fernández had warned firms about laying off staff during the quarantine period.

Last week, the head of construction workers union UOCRA, Gerardo Martínez, told Radio AM750 that several “large and small” companies were about to announce layoffs and that at least 100,000 jobs were at risk.

Under Argentine law, congress must ratify or reject an emergency decree.

Read the decree here, in Spanish.

In related news, economy minister Martín Guzmán said restructuring talks with private bondholders holding US$68.8bn in debt would continue this week and next.

Guzmán said there was no date established for the government to present its formal proposal.

He added that officials were also in talks with the IMF to refinance US$44bn owed to the multilateral, state news agency Télam reported.

Logistical issues relating to the coronavirus pandemic have hampered the progress of talks.

Sorting out its debt crisis is seen as vital to efforts to restore faith in Argentina’s battered economy. 

Also in Argentina, the government said it would create a 30bn-peso (US$465mn) loan guarantee fund to help SMEs gain access to working capital loans.

Read the associated decree here, in Spanish.

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Across the Andes, lawmakers in Chile approved a bill that establishes measures to support workers and companies impacted by coronavirus fallout.

The bill – signed into law on Wednesday – is part of an US$11.8bn economic support package.

Under the legislation, rules governing access to unemployment insurance funds are eased, targeting those who temporarily stop working altogether, as well as those with reduced working hours.

It also states that companies cannot invoke force majeure clauses citing the coronavirus to dismiss workers, local paper La Tercera reported. Lower house lawmaker Guillermo Ramírez also said that companies could dismiss staff for business reasons and that the worker would be entitled to the standard redundancy payment based on years of service. 

Labor minister María José Zaldívar said labor department officials should issue secondary rules governing the application of the law, according to the paper. 

The labor ministry, in a statement, said the legislation will help protect the income of more than 4.7mn workers.

Around 75% of companies surveyed by the central bank for its March monetary policy report said they expected to make redundancies in the next six months.

The news comes as the central bank cut its key rate to 0.5% to help support economic activity. This could be followed by further easing, according to research firm Capital Economics.

The central bank expects the economy to contract 1.5-2.5% this year and rebound in 2021. Forecast growth next year of 3.75-4.75% would be partly driven by a favorable base effect.

Prior to the outbreak, in February, economic activity continued to trend up, with growth registering at 2.7%, the fastest pace since social unrest sent the economy into a tailspin in October.  

Also in Chile, the country's largest business chamber, CPC, said an emergency health fund it established will support nine foundations that support at-risk segments.

CPC – comprising six local associations representing the banking, construction, industrial, mining, retail and tourism and farming sectors – has so far secured 43.5bn pesos (US$50.3mn) in donations from the local business community and aims to hit a target of 50bn pesos.

CPC said funds will support foundations that help the elderly, people with chronic illness, the homeless, those living in slums and other at-risk citizens. 

Funds will also help foundation workers and volunteers, CPC said in a statement.