Argentina’s economic shift highlights president’s weakening

The abrupt resignation of Argentina’s economy minister has plunged the country into an all-too-familiar anxiety that stems from its periodic financial crises over the past few decades.

The departure of moderate Martín Guzmán on Saturday also gave another sign of President Alberto Fernández’s growing isolation within his own governing coalition as Vice President Cristina Fernández gains influence. Silvina Batakis, a left-wing ally of the vice-president, was appointed Sunday evening as the new economy minister.

“What happened over the weekend was another twist in Cristina’s gradual advance on the administration,” Carlos Fara, a political consultant, said Tuesday. “It was a process that had been going on since before but started to become more evident over the last 60 days as she continued to isolate the president more and more.”

Whatever the ins and outs of power, it is clear that many Argentines are unhappy with the government. Opinion polls give the president a low approval rating and a clear majority of those polled say the country is heading in the wrong direction.

Cristina Fernández, a former president who continues to enjoy a strong base of support, chose Alberto Fernández, who lacked political clout for his own candidacy, to lead the ticket with her as vice president shortly before the elections in 2019.

The alliance was an acknowledgment that she did not have the popularity to win on her own, while it allowed her to rally her supporters for a united campaign of centre-left factions by defeating Mauricio Macri, the conservative who led it. had replaced as President. .

But the tenuous coalition quickly began to unravel, and in recent months tensions have come fully to light, with the vice president, who is not related to the president, openly criticizing him in public speeches.

Guzmán was seen as a key ally of the President in Cabinet and his resignation letter released just as the Vice President was delivering another speech criticizing the administration made it clear that part of the reason he was resigning was a lack of political support.

“Guzmán provided resistance to Cristina’s influence in economic policy,” said Lucas Romero, the head of Synopsis, a local political consulting firm.

Guzmán’s loss was particularly significant because the president had already seen several other allies leave the government, and his choice of Guzmán’s successor underscored the delicate balance he must strike in the coalition government.

“No one was going to take the job without Cristina’s approval because it would mean being kicked out within 10 minutes,” said Mariel Fornoni, director of Management and Fit, a political consultancy.

In her first public comments after being sworn in on Monday, Batakis thanked the vice president, among others, for their confidence in her.

And while offering assurances of continuity with the government’s economic plan, Batakis also said she was open to discussing the idea of ​​a universal basic income for Argentina’s poorest – an issue that Cristina Fernández recently defended.

Batakis faces many economic challenges, including trying to control inflation which is running at an annual rate of over 60% and helping four out of 10 poor Argentines.

And his appointment raises questions about the future of the government’s recent deal with the International Monetary Fund to restructure $44 billion in debt. The vice president and her allies blasted the deal crafted by Guzmán, saying it makes too many concessions to the IMF that will hamper economic growth.

Batakis said on Tuesday she would contact IMF officials and predicted the deal was likely to change.

Analysts said the change in the economy ministry highlights the growing weakness of President Alberto Fernández.

“The departure of Guzmán and the arrival of Batakis clearly show the political defeat of the president,” said Rosendo Fraga, political analyst and historian.

Marcos Buscaglia, associate economist at local consultancy Alberdi Partners, said the choice of Batakis is a “sign that the person managing the economy is Cristina”.

Still, the upheaval in economic leadership will make life more difficult for the vice president, as it will be difficult for her to play the role of critical commentator, an analyst has said.

“Until now, the vice president had tried to avoid getting directly involved in the management of the economy,” said political analyst Sergio Berensztein. “Whatever happens now, the crisis also belongs to Cristina.”


Associated Press writer Almudena Calatrava contributed to this report.

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