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ARGENTINA | 08-06-2023 01:07

Massa assesses options ahead of impending electoral decision

Argentina’s economy minister is poised to define his future in the Cabinet. Three key scenarios for sustaining calm on the money markets. A tense relationship with Alberto Fernández and a wink from Cristina Fernández de Kirchner.

Of three possible scenarios before him, Sergio Massa has decided to resign as economy minister in two of them. 

He will decide in the next few days and this will depend on the Frente de Todos coalition’s electoral line-up and, of course, his place in that universe. There is an atmosphere of constant expectancy on the fifth floor of the Economy Ministry building. The deadlines for electoral definitions are approaching and market pressures will measure the firepower of the most important minister in President Alberto Fernández’s government.

Sources close to Massa confided to Perfil that “the possibilities of him remaining at the helm of the Ministry are much reduced,” although there is a window of opportunity. In any event the unity or breakup of the government will inevitably play a role in the Frente Renovador leader’s luck as the government’s economic manager. There is another variable influencing the definition too: the increasingly tense relationship with President Alberto Fernández, even if there is still dialogue in dribs and drabs.

In the next few days the minister will dodge any public political definitions which could end up narrowing his short-term future. This is why he avoided the microphones even during his recent successful trip to China.

“Everything is under evaluation,” sources in his entourage admit, leaving the door open for a possible presidential launch despite the limitations of family opposition and his daily economic stewardship. The strain began last year when he managed to halt the run on the currency of the midyear crisis inherited from preceding minister Martín Guzmán, but still it remains.

 

Option 1: Massa to resign if he is candidate

The minister will quit his post if his presidential plans prosper. The effects of the drought on all the variables of the economy but especially on the one which worries people most, namely inflation, has left him without a “Draft Massa” drive which could convert him into a unity candidate. In any case his inner team trusts that control of the economic helm “being enough to show a capacity for management, character in government and political decision-making” to be placed at the disposal of the election campaign.

“Walk firmly, look straight ahead and keep your back upright” is one of the phrases heard within the Frente Renovador to demonstrate that the ruling coalition needs to be more convinced of its own electoral possibilities, rather than seek new recipes.

“We’re a government which has tackled and managed to find answers within one of the biggest crises, namely the drought, when there was not a single tractorazo [rural protest] despite the differences we’ve always had with farmers. That does not mean winning any battle but demonstrating that the state has a capacity for action, even in the worst times. Others, via resignation or loss of power, ended up yielding ground in government long beforehand,” a source from the ministerial entourage told Perfil.

Massa is asking for unity from Frente de Todos that would permit him to explain the government’s economic actions, perhaps the main item on the electoral agenda facing the coalitions going to the polls. While the government must account for the inflationary crisis and its effects on purchasing-power, governance within Juntos por el Cambio’s districts and that opposition sector’s endless infighting will erode their possibilities while the figure of the libertarian Javier Milei still has some ground to cover.

“Firstly, the system needs three things: ideas, force and order. There is a dissonant reality, the underground economy, which is keeping consumption and the productive apparatus going and has managed to defy all forecasts of economic contraction in the first half of the year so far, to which should be added the second link, that tractor which nobody is taking into account, Vaca Muerta [shale],” analysed the consulted source.

If finally does decide to be a candidate, he will leave the Economy Ministry to a successor who carries out his plans. But there will be no duplication of roles, a point made by Congress Speaker Cecilia Moreau to presidential hopeful Daniel Scioli: “He’s the ambassador to Brazil and has to decide if he is going to be a candidate or continue as an official abroad, which does not fit into campaigning while not obtaining credits or development assistance for Argentina.”

 

Option 2: Massa to resign if there’s no unity

The minister decided to close in June, the month of electoral definitions, two agreements for future stability this year: deals with China and the International Monetary Fund (IMF), both permitting Central Bank reserves to be replenished in the face of the crisis left by the dollar scarcity caused by the drought and the pressures for a brusque devaluation. 

The first objective was achieved with more yuans and promises of a dynamic relationship with the Asian giant. The second will arrive before June 24, according to the confident forecasts of his inner circle.

Massa knows, however, that any stability will last as long as “political order” can sustain it.

“If we go to the PASO primaries with five dwarfs, despite being part of a three-pronged race, the winning candidate will inevitably be the third of the options, with a run on the currency the next day which nobody will be able to stop. And after gaining funds and time, losing it all for a whim is not an option Sergio wants,” a source very close to the minister confessed to Perfil.

Furthermore, as the economic czar has reportedly admitted to some allied political leaders, “it is impossible to balance funding between two presidential hopefuls with government responsibilities who demand money.” 

Massa fears that any bureaucratic delay in allocating funds which is not linked in any way to electoral policies will end up placing him in an “uncomfortable” position. 

That is already happening, they admit grumbling, in the relationship with the social movements: “We send funds to [social leader Juan] Grabois but the Social Development Ministry sleeps on them and then come public protests against the Economy Ministry.” 

That is why Massa will abandon the portfolio once he has woven the web guaranteeing financial calm but he will leave before any bomb of political disorder explodes. He will pick his time well so that his exit is not held responsible for any economic disarray.

 

Option 3: Massa, as minister and consensus candidate

Massa’s continuation in the government will only be feasible if unity of action gets underway and his political clout remains intact, so that he can take credit for being a single candidate campaigning without any economic upheavals.

“It does not matter if the candidate is Pluto or Mickey Mouse because the important thing is to be convinced that our chances of remaining in government are intact, knowing that we have overcome one of the toughest crises in the history of the country and that next year, with farm produce and Vaca Muerta shale, we will have the resources for in-depth solutions,” Massa told his party colleagues.

The third option is the one most repeated by the minister, his entourage confesses, but it is also the least feasible. Such a scenario would strengthen the ‘superminister’ since he would then have a power of command within the government superior to the figure of President Fernández himself. 

But the fear is that the head of state himself will foster divisions. “He [Fernández] is boycotting now when he still has possibilities of being part of the unity. It is impossible for him to accept a single candidate who would leave him totally outside the control panel,” admitted a member of the minister’s inner circle.

In any event he will need the endorsement of Vice-President Cristina Fernández de Kirchner, with whom he “maintains fluid dialogue,” according to his entourage, and in whose direction he consistently winks, as shown by the presence of Máximo Kirchner in his trip to China.

“Although candidacies have been announced, Kirchnerism has an outlook that is very much in line with Sergio,” they assure on the fifth floor of the Economy Ministry.

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Ariel Maciel

Ariel Maciel

Editor de Economía Política en Perfil.com - Mail: [email protected]

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