Carlos Melconian criticized Javier Milei’s “overacting” with his veto: “In the meantime, retirees lost 26%”

The repercussions of the Javier Milei’s veto to the pension system approved by the Legislative Branch to increase the income for retirees. This Saturday, the former director of the Central Bank, Carlos Melconian.

The economist, who worked together with Patricia Bullrich In his presidential campaign in 2023, he said that the prelude to the veto was a “overacting“: “When I was talking about having to present how an expense is financed, Milei had not been born yet.. These issues are unalterable. But making a scandal out of this, bringing together the deputies, making the veto, is a byproduct of how this presidential period began politically.”

Then he remembered that “In the middle are the retirees, who today have been reduced to a quarter of a percentIf you read the numbers, they tell you that retirement benefits against inflation fell by 26% in the semester“That cannot be discussed because it has already been published. We must look forward and resolve the issue.”

Melconian also acknowledged the need to review the pension system: “The pension funds are financed by the formal sector and there are seven million people in the informal sector. This did not usually happen in Argentina.” “As I want to be generous with the government, I understand that they must have made an actuarial calculation, They sat down with some brain who wanted to show them that there is a cost of US$ 370,000 million and that it breaks your bank, but that is not the case for this year or the next.“, he added.

Inflation and exchange rate restrictions

Interviewed on Mitre radio, the economist analyzed that “the The process of deflation is very costly, because the last few kilos are the most difficult to lose. You can lose a little more, but it will be there latent. Lowering inflation does not only mean lowering it by the amount it takes in a month, but it is also lowering the basket that makes up inflation, such as medicine, clothing, services and food, so that it is even, so that there are no latent price increases.

In this context, he referred to tariff increases, understanding that “they have not yet been sufficient to accommodate relative prices. The question is whether inflation can continue to fall at 4% as a whole. It can, but it will be difficult. But in addition to falling, all this must be corrected internally, which is still a long way off because there is latent inflation.” “SIf you stick to 3% or 4% for 12 months, you’ve failed. This is not a serious stability program. “It was left in the middle,” he said.

Finally, Carlos Melconian asked for “seriously discuss the currency controls, the exchange rate regime and the dollar, which are three issues in one package.” “The Government is going to try to make it possible to pay credit cards in pesos and dollars. It has to look for alternatives. We will not get out of the trap, but we have to decide which trap. Cards, travel, tourism, that will continue. But foreign trade will be liberalized. The blend is no longer valid. The PAIS tax is no longer valid. The exchange rate must be modified, not with a scandalous devaluation, but in a compensatory manner when the PAIS tax is removed,” he concluded.