Argentina’s Cristina Fernandez drives weakened president into remodeling

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Argentine Peronist President Alberto Fernandez reorganized his cabinet on Friday night, empowering radical Vice President Cristina Fernandez de Kirchner and paving the way for higher public spending.

Tensions within the ruling peronist block have exploded after a centre-right opposition coalition broke the government by a 9 percentage point last Sunday’s primary with record-breaking results.Christina Issue an open letter Condemn Fernandez’s economic policy on the “political catastrophe” of the primary and demand change.

The new appointment suggested that Fernandez made further concessions to his powerful lieutenant. He himself served as president from 2007 to 2015 and is widely seen as the true power behind the throne.

Peronists are fighting to avoid defeat in the mid-term legislative elections in November, when the majority of the Senate is at risk.

Fernandez’s main ally, Santiago Cafiero, was publicly proposed by the Vice President on Friday night in an open letter released the night before on behalf of Tucuman Governor Juan Manzur.

“They collide in the worst possible way, [this has] Continued escalation. The president threatened to rule alone, and Christina blamed him for the failure of the election, “said political analyst Marcos Novalo. “After this, they may try to repair the fence, but the damage is over.”

Other Fernandez allies, such as Foreign Minister Felipe Solá, Security Minister Sabina Frederick, and Education Minister Nicholas Trotta, have left their posts, although Kafiero has replaced Sora. Christina’s letter was also aimed at Presidential spokesman Juan Pablo Biondi, who resigned hours after publication.

She argued in her mission that the president was following a “misadjusted policy” that “will definitely bring election results.” GDP collapsed 10 percent last year.

After the ninth sovereign debt default in 2020, Argentina, locked out of the international market, is printing funds to cover the government’s deficit while trying to reach a new agreement with the IMF. Inflation exceeds 50% annually, which is one of the highest in the world.

Economic Minister Martin Gusman, who has been severely criticized by Christina’s allies for trying to reduce the deficit, was not moved by the remodeling. Christina denied she wanted to get rid of him, and Argentine media speculated that he would stay there until the IMF’s agreement was reached.

“Government is now much weaker. Christina’s wings may begin to play the role that they may or may not be part of the coalition, or the coalition may collapse forever. There is sex, “Novaro said.

The toxic atmosphere within the peronist class was this week by Fernanda Valjehos of the Finance Commission, one of Christina’s close allies. I heard Fernandez’s explanation As a “hearing impaired person”, a “deafblind person”, a “clown” and a “tort” (Presidential residence). She later apologized for her comment.

Both Cristina and Vallejos want more deficit spending, and Cristina argues that Argentina has room to increase this year’s budget deficit by 1.5 percent of GDP in order to increase spending prior to elections. ..

According to Ferreles consultancy, Argentina is on track until the end of 2021 with a budget deficit equivalent to 5% of GDP. The additional spending demanded by Christina will push it to more than 6 percent, much like Guzman seeks to close the gap as part of an agreement with the IMF to rebuild $ 44 billion in debt.

“”[Cristina’s] Economic proposals are inconsistent with the IMF Agreement and long-term sustainability. She criticized Guzman for his very modest austerity policy, which led to their defeat in the elections. But she needs to know that good policy and good politics are not always inextricably linked.

Even if Guzman survives as Minister of Economy, he faces major challenges.

Argentina’s long-term fiscal sustainability is even more than this year’s budget deficit suggests, as the 2022 budget does not include income from the temporary additional wealth tax levied during the pandemic. It’s dark. The government must also deal with an additional deficit of 3 percent of GDP from the central bank’s deficit-filled balance sheet.

“The president has a very complex year two years from now,” said Faust Spotorno, Chief Economist at Orlando Ferrer.

Argentina’s Cristina Fernandez drives weakened president into remodeling

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