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Argentine President works against the clock to elect a new Economy Minister

The Argentine President, Alberto Fernandezheld meetings and phone calls on Sunday in search of appointing the new Minister of Economy after the resignation of Martín Guzmán, which deepened the political crisis that the country is going through.

The name of the new minister should be known in the next few hours, although nothing came out from the Government. “No news”told Reuters a spokeswoman before the official silence.

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The power dispute in the ruling coalition due to the public confrontation between Fernández and his influential deputy Cristina Fernández de Kirchner – which could aggravate financial difficulties and accelerate high inflation – muddies the scenario, analysts agree.

”We are facing a complex political crisis, deepened by the struggle for power. Whoever takes charge of the ministry will have a complicated task,” said Rosendo Fraga, a political analyst.

Another colleague of his stressed that the president “is on a key day where he must get the name of his economy minister right, but that he has political consensus and support to take urgent measures in a complex situation” in Argentina.

The head of the Chamber of Deputies, Sergio Massa, in his role as another member of the government coalition, appears as one of the close associates with the most interaction with the president.

Guzmán’s departure on Saturday took the center-left government by surprise, which is going through its lowest levels of approval after taking office at the end of 2019. “The positive assessment of the Government’s performance continues to decline (…) and concern about inflation continues to reach historical highs,” reported Synopsis Consultores.

A government source confided to Reuters that the departure of Guzman This was due to the lack of political support he felt to deepen a series of measures, at a time when the country’s risk marked its historical maximum.

“The new minister has to have the endorsement of Cristina (Fernández de Kirchner), otherwise he will be a failure before taking office,” said political analyst Lucas Romero.

After more than 24 hours without a headline in the Treasury’s key armchair, the rumors of names in dance multiply, which increases the uncertainty prior to the weekly start of financial activity.

Guzman he resigned in a seven-page long letter, mainly with a positive self-assessment of his term.


This departure “followed the resignation of Production Minister (Matías) Kulfas last month and increased criticism from members of the government coalition aligned with the vice president,” reported Alberto Ramos, an analyst at Goldman Sachs.

He noted that this exit “could be seen as another political blow to the president and could compromise the relationship with the IMF. A politically weaker and more unpopular presidency would increase the risk of macro policy becoming more heterodox and interventionist.

The now former official announced his resignation in a letter on Twitter, just as Vice President Fernández de Kirchner closed a massive public event that stole all public attention.

“The stage of Guzman it was exhausted (…) Argentina has many other problems, aside from the debt, and the future successor has very limited room for manoeuvre. There is a political crisis that led to an economic crisis, that is why the first thing must be resolved”, affirmed the economist Víctor Becker.

On behalf of the Center for Studies of the New Economy (CENE) of the University of Belgrano, he added that “it is necessary that the name of the new minister be known before the opening of the markets, otherwise we will have a black Monday.”

The resigning economist, 39, was key in a recent agreement of the country with the International Monetary Fund (IMF) by which 44,000 million dollars in unpayable short-term debt were renegotiated.

Economist Joseph Stiglitz, a mentor and ally of Guzmán, said that the former minister has done a great job in resolving a debt crisis left by the previous government and reviving growth after the pandemic.

“His deep principles made it impossible for him to continue in office without the government’s commitment to a united, integrated and coordinated approach to the enormous challenges facing the economy in the wake of the pandemic and the Russian invasion of Ukraine,” he said.

Faced with the complex panorama, political analysts do not rule out that the Government could take advantage of the moment to deepen the changes in the cabinet, although nothing transpired from the official sphere.

Market specialists predict that sovereign assets and the battered local currency will remain under pressure, unless Guzman be replaced by a minister with strong credentials, significant influence and political capital of his own.

Source: Elcomercio

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