Federico Basualdo
Since May of last year, when he wanted to throw to an official appointed by the vice president for energy, Martín Guzman became a person “unpleasant” for Kirchnerism. The cut subsidies to the electricity and gas tariffs that the head of the economy wanted hindered by majority of the Secretary for Energy. At the head of the resistance there was Federico Basaldo, Undersecretary of Electricity, whom Guzmán wanted to replace and could not.
It was the beginning of a series of counterpoints between Guzmán and the vice presidentrelating to level of public spendingsubsidies and, lastly, in the agreement with the International Monetary Fund (IMF).
Grants and frozen taxes. A few days after attempting to evacuate and failing to reach it, Guzmán criticized the subsidies. “We have to be self-critical. subsidies for energy are pro-rich in a country with a 57% child poverty. We are spending subsidies for electricity and gas in a sector that is not a priority, in the neighborhoods where people come from high incomeGuzman said.
“Those resources – subsidies – must be used for those who need them most. Our commitment is to optimize investments and from state investments to devote resources to those who need them most, ”said Guzmán.
But Kirchnerism maintained a moderate rate hike (between 6% and 9%), with which it even campaigned as one of its hits. The adjustment was left for 2022.
Relations with the IMF. After renegotiating the sovereign debt, the Minister of Economy has turned to seek an agreement with the IMF in 2020. While this was happening, the block of senators of the Frente de Todos – which the vice president obeys- He sent a letter to the multilateral organization.
The senators proposed areconsideration of interest, a waiting period to start annual paymentss from 2025, and payback period in a few decades. “
“In such a way that the annual disbursements do not make debt refinancing unsustainable and negatively impact the Argentine economy and the life of its company,” they added.
Guzmán has renegotiated with the IMF, but did not respect deadlines and rates that Kirchnerismo asked him. There they interpreted it as a “capacity”, which then manifested itself in various refusals.
Tax adjustment 2021. After losing the primary election (PASO) in September 2021, lThe vice president shot Guzmán again. “I pointed out that I believed that an incorrect fiscal adjustment policy was taking place which was having a negative impact on economic activity and, therefore, on society as a whole and that, no doubt, this would have electoral consequences. I did not say it once … I got tired of saying it … and not only to the President of the Nation “, said Fernández de Kirchner in a letter.
Kirchnerism was fighting for new assistance, such as strengthening the Emergency Family Income (IFE), an aid designed for the pandemic. Guzmán resisted, because he believed it hurt the tax accounts. For several economists, the “silver” plan launched by the government at the time was the trigger for inflation, which reached 6.7% per month in March 2022.
The pen”. After the elections, Guzmán headed for an agreement with the IMF on the loan contracted with the multilateral organization. The vice president had not commented on this. Her until she did it to delimit all responsibilities and transfer it to Alberto Fernández, whom she chose as the presidential candidate.
“Here it is worth paraphrasing and correcting the title we mentioned at the beginning of this text: Cristina does not have a pen… she always has it, she has it and the President of the Nation will have it. And I don’t say it, the national Constitution says it. Let no one be fooled as to who decides policies in Argentina, “explained the vice president.
Deficit and inflation: “The deficit is not necessarily the cause of economic chaos and superinflation,” said Cristina Fernández de Kirchner. “It is important to reduce the fiscal deficit,” Guzmán retorted.
In which country do the energy subsidies of 4 points of GDP work? In which country in the world is there a deficit financed with a currency that people no longer want? ” the former minister had previously expressed, underlining that the local “particularity” is not a virtue, but rather a defect.
Import festival. “It’s not like we’re missing the dollars, the dollars are out. Yes, there is an import festival. And I think we should think, the Government should think about how to better articulate the Central Bank, the Ministry of Production, AFIP and Customs, this must be articulated, with which it would not happen. These things also use a pen, no need to fight, or grab by the hair, “the former president said.
A few days later, the Central Bank indicated it was tightening the dollar acquisition brakes for companies. Companies will have to convince their suppliers to accept payments within 180 days. The measure generated an increase in the price of alternative dollars (blue, MEP, counted with liqui).
Subsidy segmentation. Guzmán was advancing with segmentation, which was the path chosen by the executive power to carry out a tariff increase. To make it happen and have no problems, the Government hoped to have a module. In this registry, families who may lose benefits may ask to keep them in certain situations.
A Ministry of Energy dependency was working on that scheme. And every week he announced that this form was going to be made public.
But the final implementation of the segmentation had to be communicated by the regulators, both in the hands of Kirchner officials. There is resistance to the removal of subsidies. And the form, despite the many official promises, is not yet public.
Source: Clarin
