Hernán Lacunza was sworn in as Argentina's new finance minister this morning, beginning a new era of economic leadership for the country in the wake of Nicolás Dujovne's departure from the Treasury.
Lacunza, the former economy minister for the Buenos Aires Province government, took the oath of office before President Mauricio Macri in the Salón Blanco of the Casa Rosada at 8.36am, in front of a group of national and provincial officials.
His former boss, Buenos Aires Province Governor María Eugenia Vidal, was among those in attendance as a sign of support.
After the ceremony, Macri greeted those present and delivered a brief speech in which he said: "I want to thank Hernán Lacunza for accepting this complex responsibility in such a difficult time. And also the family, because we always need that support ."
The president also hailed the new minister. "I want to ask you that in every decision you are going to take you have the focus on taking care of the Argentines. I do not ask you as a candidate in situation of political speculation, but as the president."
Lacunza got straight to work, meeting with Central Bank chief Gustavo Sandleris before the markets opened on Tuesday morning after the long weekend. The duo are expected to hold a press conference this morning, at which the new finance minister will speak but take no questions.
Argentina is seeking a quieter week after last week's turbulence in the markets following the wake of President Macri's heavy defeat to opposition Peronist presidential candidate Alberto Fernández in last weekend's PASO primaries. One of the new economy minister's first tasks will be to calm the markets.
Lacunza, 50, was born in the City of Buenos Aires and is married with two children. He studied economics at the University of Buenos Aires (UBA) and completed a postgraduate degree at the Torcuato Di Tella University (UTDT).
His life in the public sector began as the director of the Center for International Economy, a Foreign Minister think-tank, which he led between 2002 and early 2005. After that experience he assumed as general manager and chief economist of the Central Bank between 2005 and 2010, when Martín Redrado was president.
From 2010, Lacunza served as director of Empiria Consultores, until in December 2013, Mauricio Macri, as mayor of Government of Buenos Aires City, asked him to take up the position of general manager of Banco Ciudad, during which time he served under the then-president and current Interior Minister Rogelio Frigerio.
When María Eugenia Vidal was elected governor of Buenos Aires Province in December 2015, Lacunza became the the provincial economy minister.
A big football fan, Lacunza speaks calmly and will need a cool head to maintain an open channel with the IMF while attending to the needs of Argentines. As the peso’s drop increases prices of imported goods, inflation is likely to accelerate again, adding to the pain of a country suffering double-digit unemployment.
“I’m deeply sorry that Hernan Lacunza will have to take care of this disaster,” Guillermo Nielsen, an economic adviser for Fernandez, said in a Twitter post. “A professional with his track record and integrity deserves to take care of a more normal situation.”
Dujovne resigned his post on Saturday, capping a week of market chaos that followed President Mauricio Macri’s stunning loss in a primary vote.
The outgoing minister, who led bail-out negotiations between Argentina and the International Monetary Fund last year, justified his departure by saying the government needs “significant renewal in the economic area” following Macri’s defeat to leftist Alberto Fernández on August 10.
“No doubt we’ve made mistakes, which we never failed to acknowledge and which we tried to correct as much as possible,” Dujovne wrote in a letter to the president. “It’s been an honour for me to serve in your government.”
Dujovne’s departure comes at the end of a week that has seen Argentina’s peso and sovereign bonds fall to record lows. Fitch Ratings and S&P Global on Friday downgraded Argentina deeper into junk citing the possibility of a sovereign debt default. Investors have been dumping Argentine assets for fear that Fernández may shun the IMF deal and implement interventionist policies if elected on October 27.
Macri rolled out several economic measures this week to appease voters, including tax breaks and plans to increase the minimum wage while freezing fuel prices. Local media had reported that Dujovne didn’t support the measures because they could violate fiscal targets agreed upon with IMF in exchange for a US$56-billion credit line. An IMF spokesman declined to comment.
Dujovne’s tenure was plagued by the unpopular IMF deal, significant spending cuts, recession and inflation over 50 percent. While the economy was showing signs of improvement in May and June, this week’s market rout is likely to put it back in the red.
"My resignation is consistent with a government and political space that listens to the people and that acts accordingly," Dujovne said, in a clear message to the electorate, which still has two months left until voting in the presidential elections.
Political analyst Carlos Fara described Dujovne's departure is "natural," saying his economic management had been "very questioned."
"Now the government goes out to play differently. There are 10 weeks left for the election, so the fiscal balance is no longer useful. It is preferable to apologise to the Monetary Fund than to try to comply with the Fund losing the election," Fara told the AFP news agency Friday.