Sturzenegger appointed ‘deregulation and state transformation’ minister

Months after his appointment was first trailed, economist Federico Sturzenegger has formally joined President Javier Milei’s government.

Sturzenegger, 58, will take on the newly created role of Deregulation & State Transformation minister, the government revealed in a notice published in the Official Gazette in the early hours of Friday morning.

He will be tasked with downsizing the state apparatus, reducing its size and cost. 

The decree was signed by President Milei, heads of ministries and Cabinet Chief Guillermo Francos.

Sturzenegger, whom Milei has described as “the best economist on the planet,” has played a key role behind the scenes of the Milei administration to date. 

He authored hundreds of articles in the original version of the La Libertad Avanza leader’s ‘Ley de Bases’ reform bill and accompanying fiscal package, which were recently approved by Congress after an arduous legislative process. 

Sturzenegger also drew up many of the rule changes introduced by Milei’s sweeping emergency decree issued soon after taking office.

According to the decree confirming his appointment, Sturzenegger’s new portfolio will be in charge of "deregulation, reform and modernisation of the state with a view to resizing and reducing public spending, increasing the efficiency and effectiveness of agencies."

Last week, President Milei said the new Ministry would promote new legislation designed to eliminate regulations that “hinder the functioning of the economic system.”

Milei, who has defined the state as a "criminal organisation" and has described himself as a "mole" who "destroys the state from within," has implemented massive spending cuts since taking office. Public works projects have been ceased, tens of thousands of people have lost their jobs, education and healthcare funding has been frozen and pensions and social welfare payments have been trimmed.

Argentina recorded its first budget surplus since 2008 in the first quarter of the year, but it came at the cost of growing social unrest. More than half the population now lives in poverty, according to private studies, and while monthly inflation has slowed, it remains at more than 270 percent per annum.

Sturzenegger took the oath of office on Friday after a week in which more than 3,000 civil servants were laid off. The Justice Ministry proudly announced on Monday that 85 percent of the employees of the Women, Gender & Diversity Ministry, which was shuttered by Milei upon taking office, had been laid off.

"There is no room for superfluous spending," said Presidential Spokesperson Manuel Adorni this week. 

Cabinet rivalries?

This is Sturzenegger’s third government post. He served as economic policy secretary under former president Fernando de la Rúa and returned to state employment in 2015 to lead the Central Bank under Macri. He lasted three years in the post.

In addition to the aforementioned public posts, in three different administrations, Sturzenegger was also a deputy for PRO in Buenos Aires City from 2013 to 2015. 

Press speculation has focused on the potential rivalry between Sturzenegger and Economy Minister Luis Caputo, with whom the economist clashed during the Macri administration. Both say that is behind them and they are looking forward to working together once again. 

Sturzenegger has dedicated much of his time in recent years to studying how to downsize the state, even planning to pen a book called Manifiesto Antiestablishment (“Anti-establishment Manifesto”) on the subject.

However, in 2023, during a trip to the United States, he met with then-presidential hopeful Patricia Bullrich, who convinced him to join her economic team. 

Bullrich is today security minister and a member of the Cabinet chosen by Milei, whom Sturzenegger has also known for years.

Since the ultra-liberal leader’s triumph in last year’s election, the economist has become a key player in Milei’s government, though up until now it has been behind the scenes.

– TIMES/NA/AFP