President of Argentina works at forced marches to appoint a new Minister of Economy

President of Argentina works at forced marches to appoint a new Minister of Economy

The Argentine President, Alberto Fernandezheld meetings and phone calls on Sunday in search of appointing the new Minister of Economy after the resignation of Martin Guzmanwhich 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,” a spokeswoman told Reuters before the official silence.

The power dispute in the ruling coalition due to the public confrontation between Fernández and his influential vice president Cristina Fernandez 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 fight 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 in 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.

Guzmán’s departure on Saturday caught the center-left government by surprise, which is at its lowest approval levels 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.

Argentina faces a minimum projected inflation of 70% for 2022, high fiscal deficit, excessive monetary emission and collapse of markets, putting the third latin american economy among the worst among emerging nations.

A government source confided to Reuters that Guzmán’s departure 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 all-time high.

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.

“Guzmán resigned in a seven-page long letter to President Fernández, which mainly contained a positive self-assessment of his mandate (…) Minister Guzmán’s 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 that macro policy becomes 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.

“Guzmán’s stage 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 we have to solve the first”, 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 resigned economist, 39 years old, was key in a country’s recent agreement with the International Monetary Fund (IMF) for which 44,000 million dollars in unpayable short-term debt were renegotiated.

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 Guzmán is replaced by a minister with solid credentials, significant influence and political capital of his own.


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