What does Wall Street think of Batakis, of his relationship with Cristina and of the first contact with the IMF

The appointment of Silvina Batakis to replace Economy Minister Martín Guzmán was not celebrated on Wall Street. Analysts and investors consulted by Clarione They pointed out that the markets “thumbs down”that there was “disappointment” and they underline with concern his closeness to Vice President Cristina Kirchner and the risk of less fiscal discipline. Despite Batakis’ contact with the International Monetary Fund on Wednesday, does not wish a good future for the program with the agency.

Jorge Piedrahita, The CEO of Gear Capital Partners assured that “Batakis has given the thumbs up to Wall Street and the decline in asset prices has been strong”. this expert minimized the first conversation that the minister had with the managing director of the Fund, Kristalina Georgieva, and other officials of the agency, in which Batakis stated that she was willing to continue with the objectives set in the program.

“In practical terms, a first communication between an incoming finance minister and the IMF is simply an exchange of courtesies and mutual support,” Piedrahita said. “We have to carefully observe the actions taken by the new team and not his first public expressions which among other things try to calm the markets “.

For Piedrahita, “Batakis is a Christian soldier, with a clear mandate. And he believes that the minister “with his ideology and heterodoxy is only accelerating the crisis”.

As for the future of the agreement with the Fund, the expert believes that “The program will be renegotiated” and stressed that “Wall Street assumes that the agreement with the IMF is impossible to respect in this context because the prevailing ideology of those who forced the recent decisions of President Fernández seek a direction contrary to what was agreed with the organization” .

Walter Molano, Chief Economist of BCP Securities, noted that “Batakis has emerged as the designated replacement. She is far from being an ideologue or a technocrat, but she has proven to be a staunch bureaucrat within the Kirchnerist orbit. Her appointment has failed to calm the markets and the country will continue to bask under the dead weight of populism, heterodoxy and a lack of political leadership. “

For Benjamin Gedan, director of the Argentina Project at the Wilson Center, “when the vice president wins one of her many internal battles within the Frente de Todos there is no celebration on Wall Street. There is now more scope for government intervention in the economy and less fiscal discipline. This would jeopardize the agreement with the IMF with potentially serious consequences ”.

Gedan believes that “the new minister appears to be a very capable person, but his coalition wing he is unwilling to pay the political costs to address the country’s urgent problems, not to mention the structural reforms that Argentina requires to achieve economic growth ”.

For the analyst, Batakis’ first contact with the IMF “was encouraging, but it remains to be seen whether he will really be willing to control spending to fight inflation. You have to remember that he has this position because his predecessor could never convince the powerful vice president that the IMF is a life jacket for the country and not a slip knot. “

A New York investor who did not want his name published stated that “Wall Street was disappointed with the Batakis appointment. Although he has a reputation as a competent administrator, his appointment is seen as a triumph of politics over economics. It is considered to be aligned with CFK. There was an initial hope that someone more knowledgeable about the markets and better known to investors would get the job. “

“I hope he is able to handle the crisis. Expectations are low, so there may be a surprise, “she added.” But this appointment was political, so it’s unlikely the politically unpopular steps that need to be taken. “

Regarding the future of the program with the IMF, he said: “Argentina has not respected a program of the Fund for years. Guzmán’s resignation and Batakis’ appointment seem to make it much more likely that the country will not comply with the latest program.