Super Minister of the Economy, with extensive powers, Sergio Massa claims to want to redress a country in crisis, with the approval of Vice-President Cristina Kirchner and the forced consent of President Alberto Fernández. This August 3, barely inducted, he presented his proposals.
From our correspondent in Buenos Aires,
Serious but exuding self-confidence, Sergio Massa has just been enthroned Minister of Economy, Productive Development and Agriculture by President Alberto Fernández. Some 500 people, members of the ruling Peronist coalition, business leaders, trade unionists and special guests attend the ceremony, this Wednesday, August 3 at the Bicentennial Museum, annex of the Casa Rosada, the presidential palace. In the front row, Malena Galmarini, Massa’s wife, surrounded by the couple’s two children, exults. The family and relatives of the new minister greet him as if he had become president. The following image confirms this impression: head down, shoulders tucked in, Fernández leaves the stage on the left. On the right, Massa responds to applause from his fans. As if the succession had taken place. The painting has something surreal. We embrace around the man who now embodies power, presented since his appointment as a “super minister”, while the country is on fire. It is true that Massa is supposed to be able to rectify the situation. It is the last card of a government in distress. 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 elections.
Hitherto president of the Chamber of Deputies, Sergio Massa had set his conditions for entering the government on July 3, after the resignation of the Minister of Economy Martín Guzmán, the man who had obtained the IMF agreement on the refinancing of the $45 billion debt inherited from the presidency of Mauricio Macri (2015-2019), coming under criticism from Vice-President Cristina Kirchner and Kirchnerists of all stripes. His claims had seemed exorbitant to Alberto Fernández, whose power was already very weak, and had also been refused by Kirchner. After a day of frantic meetings and rumors of all kinds, a telephone exchange between the president and the vice-president, who had not spoken to each other for two months, had unblocked the situation, with the appointment of Silvina Batakis to succeed Guzmán. Three weeks later, and despite Batakis’ visit to the IMF, the markets’ negative reaction, the continuation of the attacks on the peso, the national currency, the revival of inflation (which goes to an annual rate of more than 70%) and the dramatic drop in Central Bank reserves, convinced Fernández, and above all, CFK (for Cristina Fernández de Kirchner) to call Massa.
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Make your difference heard
By bringing together the Economy, Productive Development and Agriculture, with the control of the tax department and more than a look at the policy of the Central Bank, Sergio Massa effectively becomes a “super” minister, almost a Prime Minister of a European parliamentary democracy, insofar as, almost offside, Fernández will have no real authority over him. This ambitious man has already been a candidate for the presidency in 2015, in the name of his own party, the Renovating Front, against that supported by CFK 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, bringing him the decisive votes of his supporters (between 15 and 20% of the total). Third character in the victory of the Frente de Todos (Front for All), behind the president and the vice-president, Massa logically became 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 cultivate his international contacts, particularly in the United States.
Coming 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 also comes from this side of the political spectrum and is a lawyer like him. But, unlike the latter, eternal supporting role before Kirchner propelled him to the presidency, and always indecisive, he seeks the light and knows how to make decisions. This is undoubtedly what explains why he wanted to take the “hot potato” of a government in distress, when, still young (50 years old), he could have waited for the presidential elections of 2023 comfortably installed on the perch of the House of Representatives. If he took this risk, many observers immediately thought, he has a plan. And this plan, he sketched it out in a press conference given on August 3, two hours after his induction.
Towards a real austerity plan
In reality, Massa presented a series of measures, which all go in the same direction, the reduction of public expenditure, monetary 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 the majority of economists. Among these, a higher-than-expected increase in energy prices, a review of social assistance to track down abuses and encourage beneficiaries to enter or re-enter formal jobs (instead of working on the black market while receiving allowances), 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 so far. No doubt Massa convinced Cristina Kirchner that there was no other way to prevent the current crisis from leading to an explosion.
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At the same time, Massa proposes to replenish the coffers of the Central Bank by relaunching exports, in particular those of the powerful agro-industrial sector, the country’s main source of foreign currency, thanks to a less unfavorable exchange rate than the one imposed on it today. today, which reduces by 50% what they receive for their sales abroad. Petroleum, mining and the knowledge industry, other export sectors, should also suffer fewer obstacles and burdens than hitherto. Quite the opposite of the traditional Peronist manual.
Massa’s coming to power, like any change in a crisis situation, has raised some hope in society, if not created a shock of confidence in a disillusioned country. Its proposals seem capable of initiating a recovery, the first indication of which would be a drop in inflation from September. The super minister will stake his credibility on his ability to keep his commitments. To follow, this September 4, the reaction of the markets.