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Managing the pump: the first steps and the surprises that Javier Milei keeps under lock and key


Highlights: Javier Milei plans to cut spending by $20 billion to $25 billion. The Central Bank will not be able to issue. The provinces will no longer receive discretionary funds from the Nation. Several of the public companies, which today cause deficits, will be privatized. The plan is based on a very broad package of projects, contemplated in a legislative mechanism called the Omnibus Law, which is usually used at the beginning of mandates, and which allows all resolutions to be approved together and in record time.

The latest moves of the President-elect and his team. The future of the dollar, public services and privatisations. The farewell of Fernández, Cristina and Massa, marked by a chilling crisis.

Tolls, prepaid, gasoline, private school tuition, telecommunications fees, rents. These are the hikes that are already underway. But others are coming: from tomorrow a process of removing subsidies could begin that will lead to sharp increases in electricity and gas bills and in train and bus fares. The fictitious dollar will also come to an end: the new government will order a notable jump in the U.S. currency that will shake the markets and seek to narrow the gap between the official dollar and the blue dollar, which today touches 150%. It is assumed that the new quote will be automatically transferred to supermarket shelves. There will no longer be pent-up inflation. Careful prices, less.

The scenario that emerges is complex. Scholars of Argentina's economic history wonder if this is the heaviest legacy ever received by a president in a democracy. Poverty reaches 44.7%, according to the latest UCA report: ten points more than when Alberto Fernández and Cristina Kirchner took office and with a forecast of continuing to rise. Year-on-year inflation stands at 142.7% – triple that of Mauricio Macri – and could close 2023 at around 180%. The parallel dollar, which Alberto received at $63, closed Friday at $990. The state of the Central Bank is overwhelming: there were 13 billion in net reserves in December 2019 and it is estimated that they are currently negative at 12 billion. With an aggravating factor: the public debt went from the equivalent of 323 billion dollars to 419 billion dollars in four years.

On these ruins, with a political party in formation and a precarious legislative landscape, Javier Milei proposes to take his first steps with a monumental economic adjustment. An unprecedented shock that implies reducing five points of the Gross Domestic Product in just one year. That is, it plans to cut spending by $20 billion to $25 billion. What is known about this initiative is that there will be an adjustment in the expenses of the policy, that the ministries will be reduced by half - there will be nine - and that all the ministers will be forced to make a drastic reduction. Whoever does not comply, will leave, says the new president. The Central Bank will not be able to issue, the provinces will no longer receive discretionary funds from the Nation, and several of the public companies, which today cause deficits, will be privatized.

Where will the rest of the bilge come from? The plan is based on a very broad package of projects, contemplated in a legislative mechanism called the Omnibus Law, which is usually used at the beginning of mandates, and which allows all resolutions to be approved together and in record time. These projects would have several surprises. Which? Milei keeps them under lock and key.

His sister, Karina Milei; his Chief of Staff, Nicolas Posse; and his campaign guru, Santiago Caputo would be the only ones who are aware of the details. Not even Guillermo Francos, the soon-to-be Minister of the Interior, knows them thoroughly. Among other things, because only yesterday the projects were in preparation. Its submission to Parliament had been announced for the first day of its term, but it will be delayed.

Several of the members of the future Cabinet and the vast majority of the 38 Libertarian deputies and 7 senators assume that they too are waiting. "Javier talks to us, listens to us and gives us some clue as to where he's going to go, but he doesn't go deeper," they say. One of them warns that the path is mapped out, but that there could be unexpected readjustments. "It's one thing to describe the bombshell, as Javier did until recently, and another to be sitting upstairs, as he will be from Monday," says one of his senior advisers.

Milei will try to deactivate it from day one. The message, now almost a slogan, is: "There is no money." The announcement provoked the first movements of social groups and piqueteros. On Monday, at the CGT, with the excuse of the presentation of authorities of the Union of Workers of the Popular Economy - one of the groups linked to Juan Grabois - trade unionists and piqueteros began to outline a plan of struggle. The toughest was Pablo Moyano. Left-wing activists could bow to their intransigent stance, as they have already announced that they will take to the streets on the 19th and 20th of this month. The grace period for the new administration, on the part of the toughest, will be less than ten days.

The rest could wait. The Evita Movement of Emilio Persico and Fernando Navarro, for example, has reportedly announced that they will not put any obstacles in the way in the short term. The Christian sectors could imitate them. Cristina herself would give some kind of media respite and Sergio Massa would go away to teach abroad.

And Alberto Fernandez? The President will go to live in Spain. He gave his last message on Friday on national television and was, as he had been for most of his administration, disconnected from reality. Today, after four tortuous years, the head of state will begin to enter the past. In truth, it has long seemed anchored there. Apart from the economic indicators, which speak for themselves, and the illegal party in Olivos at a time when the rest of society was threatened by him with the Penal Code, he could not even fulfill his most elementary promise, that of not quarrelling with his vice president and mentor.

Those public and permanent disputes, which went as far as the grotesque of Cristina communicating through public letters to tell intimacies of the relationship and why the country was heading towards the precipice, as if she were a commentator, triggered a tremor that deepened forever after the defeat in the 2021 legislative elections.

The majority of the ministers and officials of the Christian Party made the resignation available and Fernández did, perhaps, the opposite of what any other president would have done: instead of accepting them, he almost asked them not to abandon him. He even did so with his political minister, Eduardo Wado De Pedro, the material author of the rebellion, with whom he never resumed dialogue.

Since then, Alberto has endured offenses unimaginable to a president. "Whoever brought the drunk should take him," Sergio Berni dedicated to him. They called him a squatter, and Cristina suggested that he wasn't even in a position to show his cell phone because of the things he was hiding. His agenda became insignificant, even more so since Massa's inauguration, first as a super-minister and then, as a candidate, as virtual president. There were whole days when I had no official activities.

Alberto felt the cold of the plains, which is coming in his life, a little over a month ago, when he traveled to Uruguay to participate in a meeting for the organization of the opening matches of the 2030 World Cup. He met with Presidents Luis Lacalle Pou, and Paraguayan President Santiago Peña; They were joined by the president of CONMEBOL, Alejandro Domínguez, and those of the three football federations: the president of the Argentine Football Association, Claudio Tapia, the president of the Uruguayan Football Association, Ignacio Alonso, and the president of the Paraguayan Football Association, Robert Harrison.

When the summit was about to end, the head of the AFA asked for Argentine shirts to be given away. Three approached him. One he gave to Domínguez, the other to Peña and the remaining to Lacalle Pou. Alberto stared at him like, "And mine?" Tapia stared at him: "I'm going to send yours to Olivos next week."

Source: clarin

All news articles on 2023-12-09

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