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Face to face with Paolo Rocca and Martín Guzmán: the businessman complained about the tax pressure, the institutions and the need for trust

2020-12-11T08:36:54.768Z


It was in a virtual meeting organized by Techint and before hundreds of businessmen. The dialogue was friendly. Guzmán said that taxes cannot be lowered. Rocca insisted on a spending cut. The opportunities in 2021.


Silvia Naishtat

12/10/2020 2:34 PM

  • Clarín.com

  • Economy

Updated 12/10/2020 2:34 PM

It was a friendly dialogue between two acquaintances who spoke to each other and before hundreds of industrial SMEs who followed him on YouTube.

But in that spicy face to face, Paolo Rocca, CEO and main shareholder of Techint, did not keep any concerns.

This is how he proposed to Minister Martín Guzmán by the

tax pressure and the institutions

as a condition to

generate confidence and a stable scenario of the economy

.

The minister was not left without an answer either.

And it marked their coincidence in the goal of a quiet economy.

At times it seemed that he was avoiding the widespread criticism of the high tax burden.

Rocca didn't let him pass it.

The talk crowned the Pro SMEs conference that Techint has organized since 2001 for an ecosystem of 986 SMEs and suppliers that supply a group with

17 plants and 40,000 people in the world.

The climate was most relaxed.

At the time of the presentation and in an enviable Italian, the journalist Luis Novaresio wanted to know how to call Rocca: “Is it Paolo, Pablo?”, He prodded.

"Sometimes they call me Paula and I think it's good in the context of diversity," Rocca said with a laugh.

After several minutes, Rocca told the minister: “It is very important that the context

conveys confidence to businesses and consumers.

Trust is built on stability, institutional predictability, and institutional quality.

Macroeconomic stability is very important for making investment decisions. "

And he continued: “There is an issue about where the balance of the fiscal account is established or what is

the bearable level of public spending for a country to grow

that investment reaches 15% or maybe 20% of GDP.

There must be a

credible plan to contain public spending.

The tax burden is hellish

and the ability to compete with exports is lost ”.

Guzmán responded: “

The question is how it is spent

.

Argentina is not in a position to reduce tax revenues, on the contrary.

The accounts must be put in order and this is not a time to generate more deficits, "he said.

And he added: "The State has a role in development, we must move in the direction of putting the accounts in order."

And in that polite duel, Rocca jumped in and pointed out that “

the private sector is the main engine.

The State has the role of regulating and has seen itself in the pandemic ”.

Guzmán, a worthy disciple of the Nobel Prize winner Stiglitz, returned to the charge: "In recession the public sector

pushes the economy, it is the one that has to boost the private sector."

Rocca had started the conversation, which lasted for an hour, recounting the birth of ProPymes in the 2001 crisis and in what seemed like a message to politics, he said: “It was in the need to build ties.

We went through other crises, also through positive moments, but we saw

the value of working together in a united chain ”.

By the way, he characterized 2020 as the crisis

“more dramatic and less predictable

, it has been extremely hard for the family and the companies and also for Argentina, due to the global scale of the crisis.

We have passed the worst,

we are going out

and find SMEs with a positive vision.

According to our survey, they expect a

40% increase in turnover,

more exports and more employment ”.

And he reviewed the companies of his group with Ternium dedicated to flat steel that produces 40% more than in 2019, Tenaris that does not reach the half of last year but exports 70%.

Tecpetrol, which, through a gas plan, plans to

invest US $ 1,400 million, of which more than US $ 350 million will

be disbursed in Vaca Muerta in 2021. Of course, the construction area was very paralyzed by the pandemic.

“I see opportunities in this outing in the international context.

The contrast between the United States and China

opens possibilities for the industry in Mexico and Brazil

to regain a space in the value chain in the Atlantic dimension.

The aggressive competition between China and the US is far-reaching and a feature of the century.

There is a regional opportunity: Brazil is growing

and that favors Argentina.

And there is opportunity at the national level, "Rocca said before the minister.

But afterwards he asked him: “I think it is very important that

trust is transmitted, stability, predictability and institutional quality are of enormous importance

for macroeconomic stability and providing predictability.

A balance of public accounts with a reduction in spending.

The tax burden affects productive assets and exports lose competitiveness,

"he said to add that it is a general concern in SME entrepreneurs.

The questions they asked the minister were all in that direction.

"The small business needs stable references to sustain its activity," he said when giving way to the minister.

"I share your diagnosis," Guzmán seemed to say about spending and expanded: "Resolve must be at

a speed for the economy to recover.

It is an orderly sequence with a fine corridor not very fast but we have to do it otherwise we will be more dependent on the debt or the issue ”.

Guzmán had started by explaining a management that began with a prohibitive cost of credit and retraction of demand.

“The first thing we did was a scheme to boost demand by

lowering rates and without altering spending

.

Another great priority was to resolve the debt and make a program with the IMF and rebuild the public debt market in pesos, so that there is more financing in our currency.

But with the pandemic the fiscal and monetary issues were altered and we had to implement a series of measures to protect work.

Despite raising monetary financing, we are going to have inflation that will be lower by

20 points than in 2019

and that is because there were instruments for that liquidity, "he said to elaborate on the support that Argentina had in restructuring the debt with bondholders that They went from the IMF to the G.20.

“The main thing is to gain the space of common sense.

I believe that the public sector should implement complementary policies for a thriving private sector, ”said Guzmán, who insisted on his objective of an

environment of economic tranquility, which replaces the anxious economy

with a calmer economy.

Debt restructuring is not enough.

That is why a multi-year program is key to a virtuous process ”.

One of the questions was whether he would have political support in the negotiation with the Fund.

This was his response:

“There is political support.

Credit was taken and with responsibility, good judgment and in a constructive way we are breaking Argentina's turbulent history with the IMF.

You have to build and it is an opportunity.

It is multi-year and the basis of a broad agreement between politics and society ”.

He also said that the real exchange rate requires stability and that is happening.

"Today is the same as 2019. Regarding inflation, a coordination policy is key, to agree on a number."

The minister admitted a complex tax structure and

promised to simplify and harmonize it between municipalities and provinces.

In the end Rocca thanked him for his frankness.

And Guzmán responded with a wide smile.

Source: clarin

All business articles on 2020-12-11

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