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Fernandez weakened; CFK influence grows

Argentina's Vice President Cristina Fernández de Kirchner watches as President Alberto Fernández (not pictured) delivers his State of the Nation address marking the opening of the 2021 session of Congress, in Buenos Aires, Argentina, on March 1, 2021.

The resignation of Argentina’s Economy Minister, Martín Guzmán, is another blow to the autonomy of President Alberto Fernández and an advance for Vice President Cristina Fernández de Kirchner in a strategic area of ​​government, which poses an uncertain scenario for what remains of his term until 2023, analysts warned on Monday.

Guzmán, who accompanied the president since he took office in December 2019, resigned on Saturday due to the lack of political support for his plan to lower the fiscal deficit and control inflation, which has accumulated close to 30% so far this year. It was at the end of a hectic week in which the financial market also turned its back with a sharp increase in country risk, a fall in Argentine bonds abroad and a dollar that soared in the informal exchange market.

The now former minister was supported by the president despite the constant public attacks of the former president and current vice president Fernández de Kirchner (2007-2015) against the government’s economic policy and the agreement reached by the economist with the International Monetary Fund to refinance a debt of 45,000 million dollars.

Guzmán’s resignation represents a new loss for the president, who had already suffered the departure of other officials of his closest confidence. At the same time, the appointment of Silvina Batakis in the Ministry of Economy with the endorsement of the vice president suggests an advance of the Kirchnerist wing on the government.

Argentina’s Vice President Cristina Fernández de Kirchner watches as President Alberto Fernández (not pictured) delivers his State of the Nation address marking the opening of the 2021 session of Congress, in Buenos Aires, Argentina, on March 1, 2021.

“He congratulated me, I told him what I planned to do with the cabinet; she agreed”, revealed the new minister in statements to channel C5N. Batakis announced that on Tuesday “I will communicate with the IMF technicians to analyze the progress of the agreement and see how we can continue working,” without offering further details.

In tune with the economic vision of the former president, she supported an extraordinary income tax for local companies favored by Russia’s invasion of Ukraine, which is being debated in Congress, and was open to analyzing the implementation of a universal basic salary for the most vulnerable sectors of the population.

For Rosando Fraga, a political analyst and historian, “the political defeat of the president is clear with the departure of Guzmán and the arrival of Batakis”, a heterodox economist —that is, who believes in state intervention in the economy—, with a long history of experience in public administration and more akin to the populist policies of Kirchnerism. “The vice president does not govern, but she has increasing influence in power,” she added.

“There is no agreement here (between the president and his vice president), there is a truce, and a fragile one,” he warned.

Mariel Fornoni, director of the Managment & Fit consulting firm, stated that “Alberto Fernández’s weakness is extreme and what remains of the government can begin to be considered Kirchnerism.”

For the expert, this new crisis in the cabinet “only deepens the breakdown of the (governing) Frente de Todos and with it the confidence and expectations that it can generate.”

According to measurements by Management & Fit, until Guzmán’s resignation, 8 out of 10 Argentines had a negative view of the country’s situation and 7 out of 10 considered that it was going to get worse.

Fernández has a year and a half in office ahead of him with little popular support to aspire to re-election, the latent threat of hyperinflation and an internal struggle with his political partner that does not seem settled despite the departure of Guzmán. In turn, the government is required to meet a series of goals agreed with the IMF to avoid default.

“The room for maneuver for the president in the face of 2023 is zero, it is a presidency that is already over,” said Patricio Giusto, director of the Political Diagnosis consultancy. “The only question that remains is whether he will be able to complete the mandate. Regarding Cristina, the question is if she wants to take power before 2023 with all these moves that she is making. I’m inclined to yes.”

For the analyst Sergio Berensztein, this advance of the vice president on the Ministry of Economy also supposes a risk for her.

“Until now, the vice president tried to avoid direct involvement in economic management… with Batakis this changes. Whatever happens, now the crisis also belongs to Cristina Kirchner”, she assured.

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Written by Editor TLN

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