In the first place, outside borders interpret Guzmán’s departure as a capitulation of the former minister to the onslaught of the vice president, which puts the president in a precarious position, revealing the restrictions within which he has to exercise his leadership. They emphasize that Guzmán was clear about the reasons for his resignation, implicitly highlighting the gloomy outlook under the invisible hand of CFK, who does not look favorably on any kind of orthodoxy.
In this sense, they explain that for CFK, the control of the fiscal accounts and the brake on the issuance of money (measures agreed with the IMF) practically propitiate a defeat of the ruling party in the elections of October 2023. For this reason, they consider that Alberto yielded to pressure from CFK by appointing Batakis, “a well-known economist and low-profile official,” whom they mainly point out responds to the Vice President.
For Andrew Abbey, chief economist for Latin America Pantheon Macroeconomics, “at first sight, the appointment of Batakis will allow Fernández to reduce, at least for a while, CFK’s attacks on his management. But he further undermines his political autonomy, increasingly alone in his ongoing struggle with his political mentor. We will probably see more changes in the cabinet in the coming days, which will consolidate CFK at the helm, implicitly”.
Just the name of an economist with ascendancy in the establishment and ties to Wall Street could calm foreign spirits. Even though, hours before Batakis’ appointment was officially announced, Albert Ramos, chief economist of Goldman Sachs, wrote that “The departure of Minister Guzmán could be seen as another political blow to President Fernández (who faces the lowest approval ratings since the 2019 elections) and could compromise the relationship with the IMF. A politically weaker and more unpopular presidency would increase the risk of macroeconomic policy becoming more heterodox and interventionist. He added that “domestic markets, particularly the currency market, were likely to remain under pressure unless the replacement is a minister with strong credentials and significant influence and political capital of his own to improve macro policy.”
Therefore, Ramos ventured that “given the current unstable politics and political environment, the probability that Argentina will change towards a more disciplined and conventional combination of macro-policies is low; and given the low political capital of the current administration, there is a risk that the quality of the policy mix will be further weakened.” The consensus is that this weekend’s events add insult to injury and further threaten to destabilize an economy already rocked by skyrocketing inflation, soaring energy prices and lingering fears of a new debt default.
Source: Ambito
David William is a talented author who has made a name for himself in the world of writing. He is a professional author who writes on a wide range of topics, from general interest to opinion news. David is currently working as a writer at 24 hours worlds where he brings his unique perspective and in-depth research to his articles, making them both informative and engaging.
