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Xavier Miley He gives an almost religious meaning to the process of free exchange of goods and services. In his opinion, the market is like a god that never fails; a transformative force in the face of which rulers must only know how to retreat. The intensity of that belief is what puts the president in the first place A real existential dilemma Now that such a revered creature appears to be turning its back on him.
The financial turmoil of recent times has pushed the government into uncharted territory. You have to deal with A faceless enemy who isn’t afraid of Miley’s wraththe disciplinary weapon which has given them so much leverage in their relations with the political corporation.
The markets initially applauded Miley’s course and celebrated his ability to delay but ultimately succeed in passing reforms in the overseas Congress. But suddenly they shout their disbelief that the implementation of the liberal program will allow Argentina to meet its debt obligations in the medium term. Country risks rise, parallel dollars go out of control (and the gap with the official dollar widens), bonds fall, exporters sit on the harvest.
Miley is facing adversity like never before since her rise to power. Those who treat her describe her as calm and confident, although her public reactions reflect that. being more irritable than usualVulnerable to insults and prying eyes.
He asked his ministers to establish the idea behind the financial dollar activities “There’s Sergio Massa and his banker friends”. is charged with “businessmen” who “press for devaluation” And he didn’t hesitate to accuse the Chilean bureaucrat rodrigo valdes put pressure on International Monetary Fund (IMF) Improvement of economic planning.
He attacked journalists and economists, many of whom he called “fail” Which doesn’t even reach her heels. “We have to talk about people who have height. You can’t give me four glasses“He went on to refute a colleague in an interview with TN, as if he himself was not a public commentator on what the powers that be in power were doing in the past. At 11am on Wednesday, he began arguing in a harsh tone with tweeters under fake names who had criticised a post in which he had praised the deputy. Lilia Lemoine to say that “Inflation is not a rise in prices, but a monetary phenomenon”.The logic of conflict is your comfort zone.
The mantra of these hours is “I will resist.” All high-ranking officials are ordered to repeat in front of every microphone placed in front of them that there will never be another sudden devaluation. He stands by his decision not to open the exchange rate too quickly: “They want us to blow up the bomb and then come and cut his head off. We’re not going to make that mistake. They’re like this: They criticized him for being hasty and now they criticize him for being cautious.”” – says a source from the presidential environment.
Privately, Miley assessed that the announcement made by the Minister of Economy was not happy, Louis Caputoand the head of the Central Bank, Santiago Bausilito explain the “second phase” of the plan. “Exaggerated expectations were created and the result was a punishment from the market”Admitted to Casa Rosada.
It’s equally true that Miley contributed to developing that narrative when she made the announcement just hours after the approval Aadhaar lawwho was coming “Change in the monetary system”. Does this mean stock dropping? Caputo and Bausili later confirmed that no, this would be a “third phase” with no set date. The announcement was coordinated with Communications Guru Santiago CaputoWas present in the room in which his minister uncle spoke. The first scratch on the knight’s armor in the story,
Miley firmly believes that the evils will be overcome by implementing the recipe that brought her here. You can’t look at markets as “species”. He gives them a signal: he asked the economy minister to send an advance budget to Congress to make it clear that his decision to maintain the fiscal surplus and the subtle devaluation of the peso is completely safe.
But this issue is being discussed repeatedly in government offices. The need for a plan B.If the government does not explain how and when it plans to end exchange restrictions, the current volatility could be prolonged or worsen.
It is a circular trap that is difficult to untangle. Miley needs to reduce the country’s risk from about 1,500 in the last round to at least half. In this way, it will be in a position to refinance itself in international markets and dispel doubts about its ability to meet the 2025 debt maturities that it was left as a legacy. To reduce the risk rate, she needs to maintain a fiscal surplus, reach a good agreement with the IMF that strengthens reserves and get out of the exchange rate trap. How will she comply with all these steps without causing another wave of inflation, which could be dramatic in the context of an apparent recession? Also, how will she speed up the recovery if she does not get out of the trap?
Miley and Caputo err on the side of caution. They’re looking for ways to take credible, concrete steps toward ending restrictions. A late tribute to gradualism.
Its purpose is not to deviate from the sacred mission of reducing the inflation rate. The libertarian plan so far has had only one objective. The battles won in the war against inflation remain fairly level Hope in society Despite the drop in activity and attention, Miley’s positive image remains clear, at least among those who voted for her last year.
The danger is that uncertainty will prolong the recession and that fiscal balance will become harder to achieve because of a fall in revenue. The challenge is to avoid this. The vicious circle of infinite adjustmentSeen several times in recent Argentine history.
The invisible hand redefines political dynamics. Their own become involved in internal conflicts, allies have an incentive to distance themselves and opponents are excited about a rebirth that will rid them of failures that are still raw.
An extraordinary fact of the week that ended is the gap that has opened between Pro and Libertad Avanza. The match of Mauricio Macri He was seamlessly involved in the votes on the Basic Law and the fiscal package, but this week he made clear that he does not feel comfortable with the president’s intention to weaken it within the new ruling party.
Macri and Miley spent nearly two months without speaking (apart from occasional contact via chat) while he was minister Patricia Bullrich He went ahead with his idea of pushing the Pro into La Libertad Avanza. The enactment of the laws paved the way for another phase, the first milestone in the public demand for The government of Alberto Fernández compensated the national funds that were taken from the city of Buenos Aires. There was an initial commitment from Miley and Caputo to normalize the situation, in line with the court’s decision in favor of the Buenos Aires position. Seven months later, everything remains the same.
The tension was heightened by the ousting of Bullrich and his allies from the leadership of the body that decided PRO’s alliances.
“We value the government’s direction, we supported it and gave it the tools. Now they have to execute their plan,” they say in the Pro leadership, they do not rule out future agreements, but they make it clear that there are no precedents for open negotiations either. They attribute this to Santiago Caputo Bullrich led a movement against the party he headed until last year. The logic with which Miley’s mentor rejected Macronism is as follows: “We already have your votes”,
This emerging tension has fueled market skepticism. Among business people and investors, the expectation was that a second phase of the Liberal government would include officials with experience in the state bureaucracy, such as Prof Pool, who could provide what the financial difficulties in the coming months would require, a strong power coalition and a team capable of using the powers delegated by Congress.
So far, to Macri’s annoyance, Miley has preferred to stay away from an organic agreement with the Pro, even if it meant keeping in office hundreds of senior officials from the previous government, who curiously were linked to the same Massa who is accused of masterminding the financial scandal.
In contrast, Peronism is going through its own identity crisis, hoping that there are things that go on. Christina Kirchner He reappeared with his theory that Argentina’s repetitive drama is not due to public spending but a shortage of dollars. He asked his son Maximo not to leave him alone. Axel Kicillof at an event to commemorate the 50th anniversary of Perón’s death. She did so reluctantly.
The former president does not fully approve of the post-Kirchnerism adventure of the Buenos Aires governor, who wants to “build anew without denying the past.” But he allows it to happen and, above all, he wants to avoid a sense of disunity in his own camp. He believes that the Milesi government will complete four turbulent and contradictory years at the end of which there will be a new opportunity for those who represent the opposition to liberal policies. There is still no clear idea of how to make that proposal work after the Frente de Todos failure.
The government invests in the Peronist divide. Guillermo Francos And his people are clear that the division between Kicillof and Maximo is not enough. They want to dismember Peronism into infinite fragments. That is why they try to lure governors from the north, whom they encourage to become low-paid chiefs. Provincialism is a trend that predates the latest shift in power, but is intensifying.
Miley expects a Peronist delegation in Tucumán to sign the Decalogue of Good Intentions on Monday May Minutes. It will not be the pompous and fundamental act he imagined when he announced it four months ago. The representatives of the “accursed political caste” consider it a sign of courtesy towards the man who delights in exposing them as the culprit of all Argentina’s evils. Far from being a greater commitment to the “ideas of freedom” and the principles of the Austrian school. They want it to be understood that the responsibility for overcoming those inexorable forces of the market, which he so respects, rests solely with him.
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