The Super Minister of the Economy, who has a lot of power, Sergio Massa claims that he wants to solve a country in crisis, with the approval of Vice-President Cristina Kirchner and the forced approval of President Alberto Fernández. Today, August 3, almost before being inducted, he presented his proposals.
From our correspondent in Buenos Aires,
Serious but exudes self-confidence, Sergio Massa has just been appointed Minister of Economy, Productive Development and Agriculture by President Alberto Fernández. About 500 people, members of the ruling Peronist coalition, business leaders, unionists and special guests attended the ceremony, this Wednesday, August 3 at the Bicentennial Museum, annex of Casa Rosada, the presidential palace. In the front row, Malena Galmarini, Massa’s wife, surrounded by the couple’s two children, rejoiced. The family and relatives of the new minister greeted him as if he had become president. The following image confirms this impression: head down, shoulders draped, Fernández leaves stage left. Right, Massa responds to applause from his fans. It was as if one after the other happened. The painting has something surreal. We embrace the man who now holds power, who has been presented since his appointment as a “super minister”, while the country is on fire. It is true that Massa is supposed to be the one who can correct the situation. This is the last card of a government in trouble. If he fails, we don’t know what will happen. But if he succeeds, he will have a chance to run for president in the October 2023 election.
Currently the president of the Chamber of Deputies, Sergio Massa set his conditions for entering the government on July 3, after the resignation of the Minister of Economy. Martin Guzman, the man who got the IMF agreement on the debt refinancing of 45 billion dollars inherited from the presidency of Mauricio Macri (2015-2019), in the face of criticism from the vice-president Cristina Kirchner and the kirchnerists of all kinds . His claims seemed too extreme to Alberto Fernández, whose power was already weak, and Kirchner also refused. After a day of meetings and rumors of all kinds, a telephone conversation between the president and the vice-president, who did not speak to each other for two months, unblocked the situation, with the appointment of Silvina Batakis to replace Guzmán. Three weeks ago, and despite the visit of Batakis to the IMF, negative reaction in the markets, the continuation of attacks on the peso, the national currency, the revival of inflation (which goes to an annual rate which is more than 70%) and the dramatic drop in Central Bank reserves, convinced Fernández, and above all, the CFK (for Cristina Fernández de Kirchner) to call Massa.
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Make your difference felt
By combining the Economy, Productive Development and Agriculture, with control over the tax department and more than just looking at the policy of the Central Bank, Sergio Massa has effectively become a “super” minister, almost a Prime Minister of a European parliamentary democracy. , as far as, almost offside, Fernández has no real authority over him. This ambitious man has become a presidential candidate in 2015, in the name of his own party, the Renovating Front, against the CFK-supported and official Peronism, and against the future winner of the election, the liberal Mauricio Macri. In 2019, after hesitating for a long time, Massa finally joined the coalition formed by Kirchner with Fernández as his candidate, which brought him the decisive votes of his supporters (between 15 and 20% in general). Third Winning Attitude In front of everyone (Front pour tous), behind the president and vice-president, Massa logically becomes the third character of the State as president of the Chamber of Deputies. A prominent position, where he was able to make his difference heard, while continuing to develop his international contacts, especially in the United States.
From a liberal right-wing party, the UCD (Union of the Democratic Center), which joined the Peronist family in the 1990s, Massa has a background similar to that of Fernández, who is also from this side of the political spectrum and is a lawyer like him. But, unlike the latter, endlessly supporting the role before Kirchner pushed him to the presidency, and often indecisive, he is looking for the light and knows how to make decisions. This undoubtedly explains why he wanted to take the “hot potato” of a government in trouble, when, still young (50 years old), he should have waited for the presidential elections in 2023 comfortably placed on the perch of the House of Representatives. If he risked it, many observers immediately thought, he had a plan. And this plan, he outlined it in a press conference given on August 3, two hours after his accession to the throne.
To the real savings plan
In fact, Massa presented a series of measures, which all go in the same direction, the reduction of public spending, currency issuance and the budget deficit (which should be limited to 2.5% of GDP at the end of the year, as requested by the IMF), priorities for Argentina if the government wants to lower inflation according to most economists. Among them, a higher than expected increase in energy prices, a review of social assistance to track abuses and encouraging beneficiaries to enter or re-enter formal jobs (instead of working in the black market while receiving an allowance), the end of advances from the Treasury to the Central Bank, etc. Without saying it, a real austerity plan to which the Peronists would not have subscribed at the moment. Massa has undoubtedly convinced Cristina Kirchner that there is no other way to prevent the current crisis from leading to an explosion.
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At the same time, Massa proposed to fill the coffers of the Central Bank by relaunching exports, especially those in the powerful agro-industrial sector, the main source of foreign currency in the country, thanks to less unfavorable exchange rate than the one currently imposed, which reduced by 50% what they received for their sales abroad. Petroleum, mining and the knowledge industry, other export sectors, should also suffer less obstacles and burdens than before. Exactly the opposite of the traditional Peronist manual.
Massa’s coming to power, like any change in a crisis situation, raised some hope in society, if not created a shock of confidence in a disillusioned nation. Its proposals seem to be able to start a recovery, the first sign of which will be a drop in inflation from September. The super minister will base his credibility on his ability to fulfill his commitments. To follow, this August 4, the reaction of the markets.