The dollarization proposal promoted by the candidate of La Libertad Avanza, Javier Milei, will cause the country to issue again quasi-currencies, warned the economist and director of the consulting firm Invecq, Esteban Domecq.
The specialist warned about the consequences that taking this measure could bring for Argentina and fired: “Dollarization ends with patacones.”
One of the central axes of the 2023 presidential campaign revolves around the economic crisis that has been plaguing the country in recent years. The biggest debate occurred around the dollarization proposed by the winner of the PASO.
Consequences of dollarization
“When you apply dollarization it has advantages such as stability in immediacy and greater financing, but you put on a corset and lose all the instruments,” Domecq explained in dialogue with Radio Rivadavia.
The controversy surrounding dollarization increased after Milei’s victory in the primary elections, given the latent possibility that it would actually be applied. However, both from the side of Together for Change and in Unión por la Patria, they criticized the implementation of this regime in the terms proposed by the libertarian.
Domecq maintained that “it is a convertibility regime like that of the 90s but extreme. So when you have a drought you are going to have a problem, when Brazil devalues another a problem, when the dollar appreciates in the world you are going to have problems. And “This will probably end with a crisis deeper than that of convertibility and with patacones.”
Likewise, the main economic consultant of the market stated: “I find this debate fascinating, because although I can agree that dollarization is kryptonite for populism, we must talk about Ecuador, which has a fiscal deficit, they have the IMF inside twice in the last 20 years, the problem is a fiscal problem.
Domecq also gave his opinion on the measures taken by the Government after the PASO, in which it tried to improve income. Regarding this, he pointed out that “more than a flood, it is a universal deluge of pesos” and warned of the consequences.
“The Government is taking a risk here out of a survival instinct, let’s say politics. It is an attempt to try to get one more vote on the hour, but it is a very great act of irresponsibility in terms of macroeconomic policy,” he warned.
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