Despite the constant chestthumping in the media, the
warring factions united to
approve Guzmán’s bill. At least
the minister now has a card in
his pocket that he can show
the world whenever
he feels like it.
Political rifts in Argentina, while generally peaceful since 1983, are fierce. There’s all that
talk about a great divide. And so it is, but not
On Wednesday the Chamber of Deputies
approved a bill granting Economy Minister
Martín Guzmán the prerogative to renegotiate Argentina’s
mammoth debt. The outcome of the
vote: 224-2 in favour. What happened there? Where is that infamous
rift? You answer that one.
The result shows that the opposition centre-right coalition Juntos
por el Cambio (“Together for Change,” JxC), technically still loyal to
former president Mauricio Macri, is
not comfortable with the debt issue.
The lower house vote included negotiations between the new ruling
Peronist front, headed by President
Alberto Fernández, and centreright provincial leaders who have
debt obligations in the provinces
that they still rule despite last year’s electoral defeat (like
Mendoza and Jujuy).
Despite the constant chest-thumping in the media, the
warring factions united in the lower house to approve
Guzmán’s bill (it now moves to the Senate, which is controlled by the ruling party). At least the new economy minister
now has a card of political support in his back pocket that
he can show the world whenever he feels like it.
Macri is out of the parliamentary picture. But he is not
entirely absent. Raw footage of the ex-president attending
a town hall-style meeting was released this week. Macri,
wearing slacks and loafers, tells a small circle of seated
supporters that he had warned his staff about the perils of
amassing debt, but they reassured him that everything was
going to be alright. Many centre-right coalition leaders –
especially those who belong to the Radical Party – rolled
their eyes at this. The footage shows that Macri still believes in social media network spin, even after losing the
presidential election. He wants the public to believe that
the dire debt legacy is the product of his fumbling technocrats, not him. I told them that “everything could go to hell,”
he said. The former president can say whatever he likes
because he wields no formal power and is out of office. But
the centre-right lawmakers and governors who are still
donning formal working clothes in the sweltering days of
the Argentine summer have debt issues to worry about.
The former president also confirmed that he will head
the foundation of the FIFA international football federation. Macri rose to power by turning Boca Juniors into a
trophy-winning machine when he headed the club between
1994-2007. But Macri won no cups in
2019. Not only did he lose the presidency, his faction at the club was also defeated and he no longer controls the
It’s hard to imagine a comeback for
Macri while the debt issue rages on.
And rage on it does. Buenos Aires Province Governor Axel Kicillof, the progressive Kirchnerite and former economy minister, is still trying to convince provincial bondholders that they
should accept his offer to postpone the
payment of a US$250-million bond until May. The question is if Buenos Aires
Province is flirting with default – Kicillof offered, at the last minute,interest payments on the
bonds to convince the holders. But there has been no final
agreement, the governor needs 75 percent of the bondholders to agree to his terms, and the default clock is ticking.
Meanwhile Guzmán, a 37 year-old US-trained economist, shuttled to New York to meet with creditors and IMF
officials. Much of the local press underlined that the minister had revealed that so far only 26 percent of the Buenos Aires Province bondholders had accepted the offer.
Many observers are eager to pick out subtle differences in
statements between Guzmán
and Kicillof, but they could be
simply putting on a good cop/
bad cop routine in the face of a
group of nervous bondholders
about to get one ugly haircut.
Guzmán’s soft-spoken approach includes announcing
many of his steps in writing
(including the upcoming schedule released late Wednesday
night). Guzmán will meet IMF
officials in Rome on February
5 and an IMF mission will visit
Argentina on February 12. The
offer to the private bondholders will be released in March,
according to the written schedule issued by Guzmán, who is
trying to walk down the long
and winding road of debt renegotiation without waffling.
The markets are bracing for
an “aggressive haircut” which
has yet to be announced.
There’s also market anxiety
about Guzmán’s approach of
renegotiating the debt before
announcing a full economic
plan that would at least give them a clue about where the
republic is heading, financially and fiscally. IMF officials, who are also in talks with Guzmán to reprofile a
US$44-billion loan granted during Macri’s presidency,
have also hinted that they would like Guzmán to produce a coherent plan.
Still, the government seems to be insisting on its debtfirst-then-plan stance. Guzmán is a debt expert and he
might not have much of a say on domestic policies, which
appear to be controlled by Production Minister Matías
Kulfas, another key member of President Alberto
Fernández’s inner circle.