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Tuesday, March 21, 2023

Debt: why is a political agreement necessary?

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Since the time of confinement at that time, Argentines have not been able to agree on too many things. From the Budget Law in Congress to the celebrations for the World Cup.

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Perhaps the most recent event that made us excited about seeing a similar consensus again, in which it was essential to resort to our best versions, was the appearance of the UFOs the last weekend.

Thus, things, more necessary than the moderation that we asked for last December 13 in a column similar to this one, may be today the urgency of maturation of the Argentine political leadership.

The journalist and writer Andrés Danza published a few days after said column an ​​excellent note entitled “The Invisible Thread” that makes the union of Uruguayan politics. In it, Danza recalls how Uruguay was able to get out of the worst crisis in a century (so as not to distract, let’s omit for a moment how it originated) in a relatively short time, mainly thanks to the fact that Jorge Battle chose to pay the political cost and ended up losing the elections in 2004.

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Thus, this thread that describes Danza and that exhibits great political maturity, allowed the current president Luis Lacalle Pou to attend the inauguration of Lula Da Silva in Brazil accompanied by former presidents José Mujica, from the Broad Front, and Julio María Sanguinetti, from the Colorado party. It would be equivalent to Alberto Fernández having attended accompanied by Mauricio Macri and Cristina Fernández de Kirchner.

Debt in pesos and various déjà vus

These days, between technicians and politicians, accusations and debt sustainability calculations cross Twitter that remind us once again of the financial shocks experienced by our country in 2015 and 2019. But it is not only something of this century: they also take us back to the year 1989.

There are also some voices that have been heard from both sides: as did Danilo Astori in Uruguay, Carlos Melconian he laid out very clearly the need for a “patriotic resignation,” which requires candidates to come together and put political speculation aside.

Whoever wins, the next government will probably need the support of the opposition to face a deep stabilization plan. It would be refreshing and, in market terms, super bullish, if Argentina could see the presidential candidates sit down – before the elections – to agree on the terms of the political transition. On our side, that of the voters, it seems essential to demand maturity and reward it with our vote.

It’s a difficult exercise, but let’s imagine that, as a result of that meeting, the main political forces agree to lower the fiscal deficit, pay the debt in pesos and pass certain laws through Congress. But above all, let’s imagine that the commitment is credible. The only reason not to do so is political immaturity: losing a short-term advantage.

Let’s hope that this election year we can mature as a society and that no tragedy is necessary to make us grow suddenly. Because, as José de San Martín stated in that conversation: “what you are asking of me is impossible”, he answering: “yes, but it is essential”, in Argentina it is more necessary than ever for the ruling class to reach such maturity that will make it reach essential consensus for the future of the country.

Fixed Income Strategist at Adcap Grupo Financiero

Source: Ambito

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