As the month of April closed, the two main wings of the Frente de Todos ruling coalition were reportedly at loggerheads over the future of Energy Undersecretary Federico Basualdo with both President Alberto Fernández and Cabinet Chief Santiago Cafiero said to be backing Economy Minister Martín Guzmán’s “him or me” ultimatum.
Guzmán’s drastic decision to demand Basualdo’s resignation was allegedly prompted by the official’s hard line against updating public service billing to inflation, an opposition which the minister feels would destroy his plans to bring this year’s budget closer to balance with the fiscal gap inevitably fuelling inflation. Energy subsidies rose 73 percent in the first quarter of this year over the first quarter of 2020.
This issue is also seen as central to negotiations with the International Monetary Fund (IMF).
A sociologist, Basualdo is among the officials closest to Vice-President Cristina Fernández de Kirchner within the economic team, hence the delicacy of the issue. If he were to be forced out, he would be the first official responding to the ex-president’s Instituto Patria to be ousted.
The decision to give Basualdo the push was reportedly taken on Thursday morning, although sources close to Fernández de Kirchner briefed journalists that his resignation had been requested (calling the whole story “a press operation”) or that he was adamant about freezing public service billing, saying that he was open to a single-digit increase.
Just before last Christmas the vice-president had called for food price and public services to be kept in line with wage levels and pensions, a position loyally backed by Basualdo.
Guzmán felt frustrated by Basualdo’s flat defence of current utility rates as trustee of ENRE (Ente Nacional Regulador de la Electricidad) regulatory agency instead of elaborating a segmentation of electricity billing whereby government subsidies could be cut while sparing the poorest social sectors.
Economy Ministry sources were undecided whether this inability was due to Basualdo being unwilling or incompetent.
If Basualdo is reportedly on the way out, it remains to be seen whether another Federico also close to the vice-president and with a similar hostility to utility rate increases will be joining him – namely Federico Bernal, the trustee of Enargas. Bernal does not think that gas bills should rise more than six percent.
Last but not least, not all pundits agreed that it was Basualdo who was heading for the exit with higher electricity or gas bills an electoral taboo – some see Guzmán as the ultimate loser of this tussle.