Alberto Fernandez Has No Plan For Argentina’s Economy

Argentina's new president has taken oath but does not have a plan to overcome the massive debt he has inherited

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Civilized: Macri and Alberto behaved like two knights. Cristina had some curious, unnecessarily embarrassing moments. (EFE)

Spanish – Argentina already has a new president. Alberto Fernandez is the inhabitant of the Quinta de Olivos and already has his office in the Casa Rosada. Of course, given the political circumstances, the role of his vice-president is equally essential: Cristina Fernandez is already the head of the Senate and is the second in the country’s chain of command. Almost half the country that until a little while ago could not stand Alberto today prays for his good health and wishes him well. Just in case…

As expected, the inauguration ceremony where the new president takes office (the ceremony did not happen five years ago at the whim of the former president) had several interesting moments. The outgoing and incoming presidents were at the peak of their polite gestures. They greeted each other affectionately, shared a sincere embrace, and exchanged a few words of good wishes and gratitude. Cristina’s behavior was embarrassing. When Macri reached out to greet her, she looked away in a clear sign of contempt. Beyond the personal issues, the situation and the scenario required a different attitude. Macri and Alberto complied. She didn’t.

There were fading and chanting, but Macri received neither insults nor whistles. The former officials feared a hostile scenario, but the Peronist public, beyond effusively singing the national anthem, was more respectful than the former president, Christina. The snub reflected poorly on her, and immediately became a topic of discussion on social media.

In his speech, Alberto called for an end to the “divide” and appealed to people to come together as Argentines beyond their political and ideological differences. Although he was a lot more clear than Macri regarding the substantial debt he had inherited, the new president made it clear that there will be no concrete economic plan in the immediate future. In other words, the plan is that there is no plan, rather than seeking to avoid total default. Many analysts consider the current “re-profiling” as a virtual default.

In this way, Argentina continues to sink adrift at a time when a clear economic course is necessary. After the failure of the so-called “gradualism,” Macri and his team limited the government’s ability to survive in an attempt to secure their re-election. In that process, Argentina squandered reserves and resources from the International Monetary Fund that now have to be repaid. The only thing that was done last year was to spend the day to day, trying to avoid more runs of the dollar and total setbacks that would prematurely end the government. The logical course of action would have been what Ricardo Lopez Murphy and Alberto Benegas advised. Macri should have given up his plans to run for a second term and dedicated himself to correcting the economic mess. In that case, the situation would have been different today.

Unfortunately, despite the change of leadership, the country still has no economic plan, and, once again, Argentina might run out of bread and cake. In other words, just as Macri worsened the situation and did not get re-elected, the country can now default at any time, regardless of the intentions of the new government. In Alberto’s own words, the risk of falling into default is “very high.” The new president said today that Argentina intends to pay, but within the established deadlines, there is no possibility of compliance.

The appointment of the new Minister of Economy, Martin Guzman, is practically restricted to the issue of debt. However, Alberto knows very well that the country will not be able to get out of the hole it is in without a general fiscal and monetary reform. For now, we will have to wait. In a way, the fact that this is the new government’s only agenda in this important matter is a relief for Alberto Fernandez. The first cabinet, although not in a position to offer solutions, represents a good balance between the different Peronist forces that make up the Frente de Todos. But the complicated economic scenario requires prompt answers, and Alberto knows that as well. Under current circumstances, Argentina is heading straight to the cliff. Whether there is a medium-term plan or not, only the new president knows. Tomorrow we will look at the value of the dollar, the country risk, and we will continue in the same disaster in which we were last week.

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