Reducing the fiscal deficit to zero in the first year was, always, the objective that Javier Milei set out to achieve if he became president.
In the words of Federico Sturzenegger, a former head of the Central Bank with Mauricio Macri today under intense fire and advisor to Milei's letter, the balance of public accounts should serve as
“a seal of trust”
for a government that, inevitably, It starts peppered with doubts.
In case it was not clear, we are talking about a decision that is also intended to be
a message intended for the markets,
although launched in a hurry and put together in a hurry.
Luis Caputo, another former BCRA with Macri and current Minister of Economy, immediately bought the idea and
defends it at all costs.
Or, rather, he defends the so-called Omnibus Law that Sturzenegger articulated with contributions from various sources that were not always disinterested and in which fiscal adjustment is a slogan that appears everywhere;
sometimes crudely, as if it were not possible to think of something a little more flexible or deal with more elaborate ideas.
Definitely involved in a debate on the networks that tweets from one side to the other,
Caputo has played or plays to the limit
and uses weapons that are not strictly within his competence but, with a lot of good will, from the presidential arsenal.
That's the real Caputo.
He has said these days:
“The financial fiscal deficit (with debt interest) for 2023 closed at 6.1% of GDP, higher than expected.
This government is determined to end this scourge that has led us to the current situation.
The commitment to reach zero deficit will not change, whether the law is approved or not, and if any of the economic articles are rejected there will be provincial allocations that will be cut immediately.”
Reply from deputy
Miguel Ángel Pichetto,
head of the We Make Federal Coalition bloc: “ The Minister of Economy, who did not have the courage to come to Congress, has to stop putting pressure on the governors and try to find agreements instead of threatening them
.
”
And contribution to the cause of the vice-governor of Río Negro,
Pedro Pesatti:
“
We will have to defend ourselves.
In this game of threats one responds as one can.
And we can literally leave the national government without energy.”
If it is not fury or a certain impotence, the move that Milei himself tried against the governors is at least off-putting:
“I am going to leave them without a penny, I am going to melt them all
,” he said on Thursday in front of his ministers, according to what he said. a participant.
An escalation of threats
None of this is ancient history: everything happened until yesterday and it does not disappear because the Casa Rosada had warned that it was necessary to stop the escalation because the escalation threatened to take down their own objectives.
The thing is that, first, second and third, it also happened that the tremor was affecting a government that has not been in power for much more than a month and has not yet settled;
that occurs in a country shaken by a deep crisis that asks for a little peace and contains the drill and, finally, because words do not always go with the wind.
But the ball had to be stopped
.
And a good way to stop the ball was
to take the fiscal chapter out of the center of the scene,
that is, to put under an umbrella the very controversial increase in withholdings projected both for the industrial sector and for exports of certain soy by-products. as for wheat and corn.
Political relief for the governors of the agricultural provinces, who must fight with the producers for decisions of the central power
without receiving a weight of the withholdings
, which, on top of that, are left clean of dust and straw in Buenos Aires.
Caputo repeated so many times on Friday that the goal of zero deficit still stands that it is worth asking
why so much insistence.
At one point, the answer is at the beginning of this chronicle: because the zero deficit is a direct relative of fiscal adjustment and both aim to be guarantors of management in line with what the markets ask for.
What follows says that the fiscal balance
points to a broader agreement with the Monetary Fund and to meet already agreed goals.
The problem is how to cover the hole left by the withholdings.
That is, a collection estimated between US$ 1,500 and US$ 1,600 million that would round out a total package estimated at around US$ 10,000 million, which would all remain in the National Treasury's coffers.
Any rope pulled from Washington by the IMF, to pay a near maturity to the IMF itself?
It is clear in this story that the support of a law voted by Congress is not the same as that of a decree, such as the DNU with which Milei Presidente's operation began.
It is well known that a DNU can be lowered with another DNU and, precisely for this reason, the Government remains committed to passing a law that clinches the official project, even if it is in fits and starts.
And it is so clear that clearing the mined land left by Sergio Massa can be anything but a game, which becomes evident as soon as one enters the fiscal accounts.
The financial deficit equivalent to 6.1% of GDP that Caputo referred to does not compute the imbalance between income and current expenses in 2023, which was also around 3% of GDP.
With everything in, the fiscal legacy left by Kirchnerism is a hole that amounts to 11.3 trillion in pesos and that, put in dollars at the official exchange rate, means US$ 13.7 billion.
It is obvious that it was not money or not just a “money plan” that drove a growth in the fiscal deficit of 260% like the one from 2022 to 2023. Something about the old slogan “act before it is too late” also sounds like a good explanation for such a spending festival in the last year of Alberto and Cristina's K cycle administered by candidate Massa.
A resounding example of the adjustment was the distreatment of retirees under the so-called pension mobility, a formula that combines in halves the collection of the ANSeS and the increase in salaries reported by the INDEC.
Private reports warn that as a result of this methodology, minimum pensions accumulated a loss in purchasing power of $1.9 billion in the last six years, even those that were compensated with bonuses.
Without bonuses, the takeout escalates to $2.8 billion.
According to the reform proposed by the libertarians, starting in April mobility will be replaced by a system of indexation of assets tied to the monthly price index of the INDEC.
Until then, quarterly mobility will govern as we know it now;
that is, based on past inflation.
And since the new system eats up at least the January inflation, one of the disputes with the Government involves the
compensation
demanded by the opposition fronts.
In this case, the one who would lose would be the Minister of Economy.
Inflation is really brave, which seems to be in the area of 20% monthly: some consulting firms estimate around 25% for January, that is, similar to the 25.25% in December and 56% accumulated in just a couple of months. .
On top of that there is everything and everything is called increases, between January and February.
Riding on already considerably high rates, we have electricity and gas;
fuel, prepaid, buses, trains, subways and the signatures continue.
There is that and a horizon that looks complicated, since the gain in competitiveness left by the devaluation in mid-December has already been reduced by half and many eyes are already settling on April and making calculations for April.
Let's say that the Milei-Caputo fight with the governors doesn't help much here either.
Rather the opposite happens:
it sows distrust in the management and strength of the Government.
The point seems to be Milei's inflexibility and an obvious driving problem in Milei.